Poker wins and cash games = commercial income?

The plaintiff in that will did not declare poker profits and income from cash games to the tax office as income from the income tax return. However, in the context of an external audit, the Finanzamt concluded that the applicant, as a professional poker player, had obtained both commercial income and turnover subject to VAT and issued corresponding tax notices.

The legal proceedings regarding the VAT assessment notices were initially unsuccessful, as the Federal Fiscal Court overturned the ruling of the Münster Fiscal Court, as there was no direct link between participation in poker games and the prize money received in the event of success.

Accordingly, the applicant also took the view, in the action brought against income tax and business tax, that he had not engaged in commercial activity. Rather, poker is purely a game of chance.

The court only upheld this action at the beginning of his career, when he participated in poker tournaments only in addition to a regular profession. The applicant’s profits in the early years were due to ‘beginner’s luck’.

As a “professional poker player”, however, this looks different. With a professional approach and with training, winnings would no longer depend solely on happiness.