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Do you pay tax on gambling winnings in Sweden?

Gambling winnings in Sweden are subject to taxation, but there are some exemptions and special rules that determine how much tax you need to pay. In this article, we’ll take a look at the key things you need to know about paying taxes on gambling winnings if you are a resident of Sweden.

Do you have to pay tax on gambling winnings in Sweden?

In general, yes – gambling winnings are considered taxable income in Sweden. This applies to winnings from lotteries, casinos, sports betting, poker, bingo and other games of chance.

According to the Swedish Tax Agency (Skatteverket), all winnings from gambling in Sweden are subject to tax if the amount exceeds 100 SEK. This includes both cash winnings and the fair market value of any non-cash prizes.

So if you win 101 SEK or more from any type of gambling activity in Sweden, you are required to report this as taxable income on your annual tax return.

What tax rate applies to gambling winnings?

Gambling winnings are taxed at a flat rate of 30% in Sweden. This means regardless of how much you win, 30% of the winnings will be withheld as income tax if the payout is over 100 SEK.

For example, if you win 10,000 SEK from the lottery, you will owe 30% tax on the full 10,000 SEK, which is 3,000 SEK. So you would receive 7,000 SEK after taxes are deducted.

This 30% gambling tax rate applies equally to residents and non-residents in Sweden. Your total income level does not affect the rate.

Are small or occasional winnings tax-exempt?

Yes, Sweden allows a tax exemption for small, infrequent gambling winnings under 100 SEK. This means if you only win a trivial amount occasionally, such as 10 SEK from a lottery ticket or 50 SEK from casino slots, you do not have to report it or pay any tax.

The 100 SEK tax-free threshold applies per payout. So you could theoretically win up to 99 SEK each from multiple sources and not owe any tax, as long as no single payout exceeds 100 SEK.

However, the tax agency may look at the total amount if you are winning trivial amounts frequently from the same source. In that case, your winnings could be aggregated and you may need to pay tax if the total goes over 100 SEK.

Are there any other exemptions from gambling tax?

There are a few other situations where your gambling winnings may be exempt from taxation in Sweden:

  • Winnings from company lottery/games – If your employer provides lottery games or prize draws for employees, these winnings are tax-free.
  • Private home games – Winnings from informal gambling activities among friends and family, such as poker night, are not subject to tax.
  • Foreign winnings – Swedish tax law does not apply to gambling that takes place outside of Sweden. However, you may need to check the rules of the other country.

It is important to note that these exemptions only apply to legitimate, legal gambling activities. Any winnings from illegal gambling are considered tax evasion and you could face criminal penalties.

How are gambling winnings taxed – withholding or self-reporting?

For most organized gambling activities like lotteries, casinos and betting, the tax on your winnings will be automatically withheld before you receive your payout. This withholding tax is taken at the 30% rate mentioned earlier.

For example, if you win 50,000 SEK at a Swedish casino, you will only receive 35,000 SEK (after the casino deducts 30% or 15,000 SEK in tax). You do not have to report this income separately or pay additional tax on it.

However, for certain types of gambling where withholding is not possible, you may need to self-report the winnings and pay tax directly to the Swedish Tax Agency.

This includes winnings from:

  • Private betting or poker games
  • Foreign gambling sources which don’t withhold Swedish tax
  • Winnings you collect in installments over multiple tax years

In these cases, you must declare your winnings as income on your annual tax return and make arrangements to pay the 30% gambling tax owed.

Can you deduct gambling losses against winnings?

Unfortunately, you cannot offset gambling losses against winnings for tax purposes in Sweden. Even if you lose money overall from gambling activities, any taxable winnings over 100 SEK will still be liable for the 30% tax.

For example, say you win 20,000 SEK from betting on horses, but lose 25,000 SEK on casino slots. You still owe income tax on the full 20,000 SEK horse racing winnings, even though your net gambling outcome for the year was negative.

The only way gambling losses can be deducted is if you are considered a professional gambler for tax purposes. The criteria for being categorized as this is very restrictive. You would need gambling to be your sole or primary livelihood and source of income.

Do you pay tax on gambling winnings from other countries?

Swedish tax residents are required to report their worldwide income on their Swedish tax return. This includes any gambling winnings, wherever they are won in the world.

So if you win gambling money while overseas, even if tax was not withheld, you still need to declare it and pay 30% tax in Sweden.

There are two scenarios when gambling abroad:

  1. The foreign country has no tax on gambling winnings – You declare the full winnings in Sweden and pay 30% Swedish tax.
  2. The foreign country deducted tax at source – You declare the post-tax amount in Sweden. You still need to pay Swedish tax, but receive a credit for foreign taxes paid.

The one exception is winnings from gambling providers based in the EU, EEA or treaty countries. If tax was properly paid there, the winnings are exempt from Swedish tax under double tax agreements.

Do you pay tax on gambling winnings from online betting sites?

Winnings from licensed online betting sites and internet casinos are treated the same as their land-based counterparts for tax purposes in Sweden.

If the site is registered and regulated under Swedish gambling laws, they are required to deduct 30% tax on payouts over 100 SEK. So any winnings you collect from Swedish sites will already have tax withheld.

For offshore gambling sites, winnings are taxable in Sweden but you may need to declare and pay the tax directly if no withholding applies. The same principles cover games like online poker and bingo.

Are lottery and scratch card winnings taxed differently?

There is no special tax treatment for lottery or instant scratch card winnings in Sweden. They are subject to the same flat 30% tax rate as other forms of gambling income.

For large lottery wins paid out by Svenska Spel (the state-owned lottery operator), tax of 30% will automatically be deducted before you receive your winnings. You do not need to report these separately.

Small scratch card prizes under 100 SEK are tax exempt. But for substantial instant win prizes over this threshold, tax applies in the same way.

Are winnings from contests, prize draws or free promotions taxed?

In general, prizes you win in contests, drawings, competitions or promotional free-giveaways are not subject to gambling tax in Sweden and can be received tax-free.

These types of activities are not legally considered gambling, provided participants do not pay any money to enter. Since no wager or bet takes place, winnings are not classified as taxable gambling income.

However, in rare cases where major prizes are awarded, the tax agency may try to categorize the winnings as “other income” subject to taxation. But there is no set precedent or percentage rate in these situations.

Can you reduce your tax rate on gambling winnings?

The 30% Swedish tax rate on gambling winnings is a flat rate set by law, so there is generally no way to reduce it. All residents and non-residents face the same rate regardless of other factors.

Even if you have substantial losses or low income, you must pay 30% tax on any taxable gambling winnings in Sweden.

The only exception is if you reach an agreement with the Swedish Tax Agency for an alternative tax arrangement in special circumstances. However, this is relatively rare and difficult to obtain.

Do professional gamblers get any tax benefits in Sweden?

If you successfully apply to be classified as a professional gambler, you may receive some preferential tax treatment compared to casual or hobby gamblers in Sweden.

The key benefits are:

  • Ability to deduct gambling losses against winnings
  • Gambling expenses can be deducted
  • Option to pay tax based on your net gambling income at standard income tax rates, rather than 30% on gross winnings

However, the criteria to be accepted as a professional gambler for tax purposes are strict. It must be your sole or primary livelihood. Recreational gamblers cannot claim professional status.

Is there a tax on frequent smaller gambling winnings?

As mentioned earlier, gambling winnings under 100 SEK per payout are exempt from tax in Sweden. But if you are winning trivial amounts frequently, the tax agency may try to apply some tax.

If the pattern of repeat small winnings is flagged, the tax office can argue that this amounts to frequent and systematic gambling as a professional activity.

In this case, they may aggregate the winnings over a period (e.g. tax year) and require you to pay 30% income tax if the total exceeds 100 SEK.

Do you have to report gambling winnings to the tax agency?

You are only required to actively report your gambling winnings to Skatteverket in certain situations:

  • The winnings were not subject to withholding tax in Sweden
  • You won the amounts from private gambling activities
  • The winnings were paid in installments over multiple tax years

In these cases, you need to declare the winnings as income on your annual tax return so the tax office can assess your gambling tax liability.

If tax was already deducted at the source (e.g. lottery, casinos), you do not have to report the winnings separately. But you must keep receipts in case of an audit.

What records should you keep for gambling winnings and tax purposes?

You should maintain detailed records of any gambling winnings, losses and expenses to support your tax return and in case of an audit by Skatteverket.

Documents to keep include:

  • Casino or lottery receipts showing winnings amounts and tax withheld
  • Bank records showing receipt of winnings payouts
  • Details of any winnings from private betting, poker games etc
  • Records of significant gambling losses for possible write-off (for professional gamblers)
  • Expenses like travel costs and gambling magazine subscriptions (for professional gamblers)

Keeping accurate contemporaneous records also helps protect you against allegations of underreporting income or tax evasion.

What happens if you don’t report gambling winnings or pay the tax owed?

Failing to properly report gambling winnings and pay required taxes is considered tax evasion in Sweden and can lead to serious consequences.

If discovered in an audit, you will face paying the outstanding tax owed, plus substantial penalties and interest charges.

For large or repeated cases of undeclared winnings, you may be charged with a tax crime which can lead to:

  • Fines of up to 115% of unpaid tax
  • Up to six years imprisonment

The tax agency also has expanded powers to access bank records and other private information to identify unreported winnings derived from gambling.

Can gambling winnings affect mortgage or loan eligibility in Sweden?

When applying for a mortgage or consumer loan from a Swedish bank, sudden gambling winnings could influence your application.

Lenders may treat large gambling winnings as an unreliable source of income compared to regular salaries. So this could negatively impact your borrowing capacity.

Some other implications include:

  • Need to demonstrate tax was paid on winnings
  • Bank inquiring on source of funds if amounts are substantial
  • May impact debt-to-income ratios considered in affordability assessments

On a positive note, responsible gambling winnings could help demonstrate financial management skills.

You should disclose any material gambling winnings honestly to avoid issues down the track if loan funds are later traced back to gambling accounts or activities.

Do gambling winnings need to be declared for bankruptcy in Sweden?

If you are filing personal bankruptcy in Sweden, you are required to fully disclose all your assets and liabilities, including any gambling winnings.

Undisclosed income won from gambling in the lead up to bankruptcy can jeopardize your eligibility for debt relief.

You will need to provide evidence:

  • Gambling winnings were accrued before the bankruptcy order was issued
  • Any tax obligations related to the winnings have been properly met

These obligations apply equally whether gambling winnings are paid in a lump sum or as ongoing installments over time.

Full transparency will help ensure your personal bankruptcy and debt recovery proceedings meet legal requirements.

Do gambling winnings need to be declared when applying for Swedish welfare benefits?

Gambling winnings and losses may need to be reported when applying for Swedish welfare benefits like:

  • Housing allowance
  • Unemployment benefits
  • Sickness benefits
  • Income support payments

This is because winnings can count towards assessed income levels, which determine your benefit eligibility and rates.

Larger occasional winnings are generally exempt, but frequent or regular gambling winnings may impact your welfare payments.

Any gambling winnings also should not affect your savings or assets beyond approved thresholds. Full transparency of your finances is recommended when interacting with welfare administrators.

Are Swedish gambling winnings taxable in other countries?

If you are a foreigner who won gambling money in Sweden, you may have to declare the winnings and pay tax when you return home.

Many countries taxes their residents and citizens on worldwide gambling winnings.

You will receive a credit for any Swedish tax paid upfront. But you could still owe additional tax if your home country’s rates are higher than the blanket 30% in Sweden.

Some countries like the US even tax gambling winnings of their non-residents. Check regulations carefully before you gamble in Sweden.

Summary

Here is a quick summary of key points on how gambling winnings are taxed in Sweden:

  • Winnings over 100 SEK are subject to 30% tax
  • Tax applies equally to residents and non-residents
  • Lotteries, casinos etc deduct tax upfront before payout
  • Private gambling requires self-reporting and payment
  • Losses cannot offset winnings for casual gamblers
  • Foreign gambling subject to Swedish tax for residents
  • Failing to declare winnings risks penalties and prosecution

Ensure you keep accurate records, report winnings responsibly, and pay gambling taxes owed. This will avoid problems with the Swedish Tax Agency.