The government of Japan is considering a proposal that would mean withholding taxes on the winnings of non-residents or foreigners at casino resorts. It is taking a very close look at tax systems but sources claim tax investigations would be difficult when the gamblers leave the country.
Countries, such as the US and South Korea, employ a system where taxes are withheld on winnings. Should this arrangement be approved in Japan, foreigners will be required to pay taxes on winnings, just as the country already has in effect for horse racing. The amount will depend on the chips purchased, and how much was won.
Other Rules Being Considered
Due to these new regulations, Japan’s government is also considering rules that would require all casino operators to keep and maintain records of how many chips are purchased and the gaming results. Furthermore, laws are in the making that would prevent players from pretending that the chips they won were actually purchased.
This would also aid in preventing non-resident winners, from passing off their winning chips to a friend on a casino resort premises, to help hide their winnings. While the exact rate of taxes to be paid has not yet been announced, plans have already been made to tax winnings as “temporary income.”
Proposals Will Be Implemented After April 2021
Although these proposals must be finalized by ruling parties, they will be outlined in the 2020 tax reforms and implemented after April 2021.
A Japanese government official gave a statement saying, “If we do not decide on a certain framework in advance, it will affect the investment decisions of operators.”
Before the bill was passed by lawmakers in July 2018 that allowed casinos to operate in the country, the only legal gambling activities consisted of sports such as cycling, horse racing, and powerboat racing.
Plans have been made for three new resorts to be operating by mid-2020. Each will include a hotel, gambling areas, and conference rooms.
Japan Expects to Become the Third-Richest Gaming Marketer
Japan will become the third richest gaming marketer in the world, following behind Nevada and Macau. Steve Wynn announced his intention of launching the largest casino in the world in the country, and other casino operators have also expressed interest in Japan.
Chris Gordon, who is the leader of the campaign, said the government has set goals to increase tourism to a higher level within the next 20 years. He acknowledged they are in agreement with this decision and claims Japanese society has shown interest in gaming, which they already have with horses, pachinko, and motorboats.
Japan Will Soon Set Tax Regulations on Foreign Gamblers
Japan's government reported it will soon be implementing new tax laws that will require foreigners to pay taxes on winnings depending on the amount spent.