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Online poker: BFH confirms possible income tax liability

This post is also available in: Deutsch

The German Federal Fiscal Court (Bundesfinanzhof, BFH) recently issued an important ruling on the tax implications of winnings from online poker. In its ruling of February 22, 2023 (X R 8/21), the Federal Fiscal Court (Bundesfinanzhof, BFH) determined that profits from online poker may be subject to income tax as income from business operations. This decision has significant implications for professional poker players and those who make substantial profits from the game.

According to the BFH, the tax treatment of winnings from online poker depends on whether the player focuses on structural commercial aspects or whether he merely satisfies private gaming needs like a recreational or hobby player. This is similar to the tax treatment of athletes. A decisive criterion is the “guiding principle of a professional player”, which is characterized in particular by the planned exploitation of a market using professional experience.

In addition, the BFH has determined that the room in which an online poker player’s computer is located, from which he carries out his activity, can be considered a permanent establishment if the taxpayer has a power of disposal over this room that is not merely temporary. If this permanent establishment is located in Germany, the activity is subject to trade tax. This decision builds on earlier BFH rulings dealing with the taxation of winnings from tournament poker and casino poker.

The case in detail

The case underlying the ruling involved a mathematics student who had started playing online poker in the Texas Hold’em/Fixed Limit variant in 2007. He started with small stakes and gradually increased them. Accordingly, its profits also increased over time. In the year in dispute, 2009, he already generated a profit of more than €80,000 from the online poker game, and his total registered playing time amounted to 673 hours in the period from July to December 2009 alone.

The Tax Court assessed the facts as a commercial activity from October 2009 and ruled that the profit of a good €60,000 generated in the months from October to December 2009 was subject to income tax.

The BFH follows the decision of the tax court

The Federal Fiscal Court confirmed the decision of the Fiscal Court, following up on earlier decisions on poker games in the form of face-to-face tournaments and in casinos. The BFH stated that poker is not a pure game of chance from an income tax perspective, but is also characterized by elements of skill. This also applies to online poker, even if there is no personal contact with the other players.

When are winnings from online poker taxable?

It is important to note that not every poker player is subject to income tax. For recreational and hobby players, profits and losses remain irrelevant for tax purposes, as it is a private activity. However, if the scope of a private hobby activity is exceeded and the player is no longer concerned with satisfying his gaming needs but with generating income, his actions are classified as commercial.

Decisive for the classification as a commercial activity are factors such as the planned nature of the action, the exploitation of a market or the extent of the invested budget of money and time. In the case discussed, the significant sum of over €60,000 and the significant time investment of 673 hours over six months was critical.


The BFH’s ruling makes it clear that profits from online poker can be regarded as income from business operations under certain circumstances and are therefore subject to income tax. While casual players who play poker as a hobby are not affected, those who play regularly and make significant profits should consider the tax consequences.

Professional gamblers should be aware of the criteria that can classify their activity as commercial, such as the planned nature of their actions, the exploitation of a market, or the amount of money and time budget invested. In such cases, it may be advisable to seek legal advice and find out how to declare the winnings from online poker in the tax return.

It is also interesting to note that the BFH does not consider poker to be pure gambling. It recognizes that both skill and strategy play a role, and this applies to both traditional poker in casinos and online poker. This recognition of the skill component could have a long-term impact on the perception of poker as a profession.

Overall, the BFH ruling highlights the growing relevance of online poker as a potential source of income and underscores the need to be aware of the tax obligations that come with significant winnings from the game.

Marian Härtel

Marian Härtel

Marian Härtel is a lawyer and entrepreneur specializing in copyright law, competition law and IT/IP law, with a focus on games, esports, media and blockchain.


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