Italian poker players Pier Paolo Fabretti, and Cristiano Blanco, have become two of the most enamored players in Italy after winning a landmark taxation case against the Italian Inland Revenue, after the European Union Court of Justice ruled that Italian poker players do not have to pay income tax on poker winnings attained in other EU states.
Team PokerStars Online member, Pier Paolo Fabretti, and fellow countryman, Cristiano Blanco, have become the toast of Italy after pushing a landmark taxation case through the European Union Court of Justice (CJEU).
Italian poker players do not have to pay income tax on poker winnings attained in other European Union (EU) States. That’s the word issued by the CJEU after Fabretti and Blanco took their fight against the Agenzia delle Entrate — Direzione Provinciale I di Roma — Ufficio Controlli (Italian Inland Revenue) all the way to the top.
Court papers reveal that on Dec 1, 2011, the Italian Inland Revenue served Cristiano Blanco with three notices of assessment after he failed to file income tax returns for all three tax periods between 2007 & 2009.
In response the Inland Revenue subjected him to tax adjustments of €488,703.16 (2007), €23,919.86 (2008), and €41,291.89 (2009), by way of personal income taxes, tax increases and penalties.
Five days later, and the same establishment served Fabretti with a notice of assessment, claiming payment of €45,327.48, after they alleged he failed to declare the €52,000 that he won in the €10,500 No-Limit Hold’em (NLHE) High Roller at the Italian Poker Tour in Nova Gorica.
The Italian Inland Revenue maintained that both Blanco and Fabretti had to pay those sums because they constituted ‘other income’ within the meaning of Article 67(1) (d) of the DPR 917/86. The players attorney’s argued that as winnings in Italian casinos are not subjected to income tax regulations, having already been taxed at source (i.e. the casino), then the same protection should be afforded in other EU states that have similar legislation (i.e. taxed at source).
Despite the Italian Government arguing that their stance allowed them to exercise more control over problem gambling, money laundering, and control over capital coming into Italy, the CJEU ruled that, “Articles 52 and 56 TFEU must be interpreted as precluding legislation of a Member State which subjects winnings from games of chance obtained in casinos in other Member States to income tax and exempts similar income from that tax if it is obtained from casinos in its national territory.”
In short, poker winnings earned in other EU states would not be subjected to income tax as they have already been taxed at source.
Italian poker player, Eros Nastasi was delighted when heard of the verdict: “This is incredible news! Many of us had hope, and we now love this moment! The victory of my friend ‘Blanco’ has created the right for each of us the freedom to be able to play more poker abroad. Until this verdict many Italians were moving away from tournaments abroad, but this has all changed. You will see many more familiar Italian faces in the big tournaments abroad.”
“I think this is, of course, positive for both the Italian and European poker communities. In the past 3-4 years a lot of Italians decided not to play outside of Italy anymore because of this tax problem. I will be happy to see more Italians during EPT and WPT from now on.”