Betting Tax Singapore

Want to start and promote a betting business? Before you go ahead, you need to know all about the relevant IRAS taxes that are applicable to such a business.

To start a betting or sweepstakes business, you’ll first have to get an exemption. After a thorough examination of your application, if you’re found to be eligible, an exemption will be granted by the Minister of Home Affairs (MHA).

The exemption will be granted to you under the Common Gaming Houses Act or the Betting Act. After the Ministry of Home Affairs has awarded you or your organisation an exemption under the aforementioned act, the new development has to be gazetted by the Minister of Finance. It will be published and recorded in the Betting and Sweepstake Duties Order.

Why Are Betting Activities Regulated in Singapore?

According to the IRAS Singapore, the government has decided to regulate betting and sweepstakes activities with the intention to prevent proliferation. Placing bets with unauthorised agencies is strictly prohibited and punishable under law.

Is Income Generated Through Betting Activities Taxable?

Yes. Income generated through betting/sweepstakes activities will be subjected to taxation by IRAS. It is governed by a law called the Betting and Sweepstake Duties Act.

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Which Types of Betting Are Taxable?

As discussed already, the Betting and Sweepstake Duties Act gives IRAS the authority to collect taxes on approved betting activities. Under the scope of this act, taxes can be levied on the following activities:

  • Do you own an exempt organisation as per the Gazette records maintained by the Ministry of Finance? In that case, duties will be imposed on any sweepstake activities promoted by your organisation.
  • Do you have a valid licence to promote betting activities in Singapore? If yes, then any betting activity conducted with the help of a pari-mutuel machine will be taxed.
  • Are you a licenced betting agency? If fixed-odds betting activities in relation to a sporting event or a game of football are held by you or at your behest, such activities will be taxed.
  • Are you an exempt organisation gazetted by the Ministry of Finance? If your agency administers, conducts, promotes, organises, or operates any other mode of cash/credit betting, you’ll be taxed by IRAS.

What Is the Method of Tax Computation?

IRAS uses different methods of tax computation depending on the type of betting activity. Here’s what you need to know about them:

  • Tax on bets placed in regards to horse racing and conducted with the help of totalisator machines and sports betting is calculated as follows:
    • Tax = 25% of (Value of the bets received - Value of prizes distributed - GST)
  • Tax will be calculated on sweepstake activities as follows:
    • Tax = 30% of (Total amount paid towards the sweepstake - GST)
  • Tax on betting activities other than horse racing, conducted with the help of a totalisator will be calculated as follows:
    • Tax = 30% of (Total amount of bets accepted - GST)
  • Tax on other forms of cash or credit betting will be computed as follows:
    • Tax = 25% of (Total money collected on bets - GST) (until 30 June 2014)

GST will be calculated as follows:

GST = 7/107 x (Money collected on bets - Winnings distributed among winners)

Let Us Illustrate:

Let us assume that S$10,000 was raised in a sweepstake activity and S$4,650 was paid in winnings. Then the GST applicable would be S$350 [(7/107x(10,000-4,650)]. The tax the promoter will have to pay on the earnings from this sweepstake will be S$2,895 [30/100x(10,000-350)].

[Disclaimer: The numbers used in the example above are purely for illustrative purposes and may bear no resemblance to actual results.]
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Who Is a Promoter of a Betting Activity?

Under the Betting and Sweepstake Duties Act, a promoter is the secretary of an association that is promoting a particular betting activity. At present, Singapore Pools (Private) Ltd. and Singapore Totalisator Board are authorised promoters in the country.

Are the Promoters Obligated to Submit Tax Documents?

Yes, the promoters will have to submit the following to IRAS periodically:

  • The total amount of money collected in bets.
  • The total amount of money paid to winners.
  • The total amount of tax owed to IRAS.

What Is the Permissible Period Within Which Duty Has to Be Paid for Each Type of Betting Activity?

Depending on the type of authorised betting activity, you’ll have to submit a valid statement and pay taxes as follows:

Betting Type Maximum Permissible Period for Filing Statement
Sports betting Within 15 days of the event
Betting on horse racing using pari-mutuel Within 15 days of the last day of the race
Sweepstakes Within 15 days of the determination of winners
Other types of betting Within 15 days of the draw date

[Note: IRAS may, at its discretion, extend the deadline of filing a statement/paying the tax dues.]

Are There Penalties? What Are They Imposed On?

IRAS may impose penalties if the following anomalies are detected:

Falsification of Statement

IRAS reserves the right to impose a fine on any promoter if it detects fraud. If you (the promoter) try to defraud IRAS by submitting a false statement or by failing to submit a valid statement, you’ll be liable for conviction. The conviction could be in the form of a fine.

The fine could go up to 4x the amount of duty payable, subject to a minimum of S$1,000. If IRAS so decides, it could compound the offence and levy a fine equal to double the amount of duty payable, subject to a maximum of S$5,000.

Late Delivery of Statement

If you fail to submit a valid statement within the due date, you may be liable for a fine of up to S$500. If IRAS decides to compound your offence, it can impose a fine of up to S$250. To stay on the right side of the law, make sure that you acquaint yourself with the relevant rules. It would help you grow your business legally and without upsetting IRAS.

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