Casino operators across the world are eager to get a casino license in Japan and foreign gamblers are just as eager to venture into Japan and start playing at these integrated resorts. Gamblers from around the world are expected to visit Japan and play at newly developed casinos. What foreign gamblers will need to bear in mind is that they might be charged different tax rates on their winnings based on what country they're coming from.
The Japanese parliament is finally making headway with the Integrated Resorts (IR) bill as the Japanese lower house passed the bill on June 19. The bill is now heading to the upper house and the Liberal Democratic Party will look to extend the session to pass the IR bill before the end of July.
While a number of details have already been agreed upon by the Japanese lawmakers, there is still much work to be done. One of the details that still need to be fine-tuned is the kind of tax system that gamblers will have to follow based on their winnings from the casino.
According to Diet discussions, all profits earned inside their casinos will be treated as occasional income and will be subject to income tax. But since the government is expecting gamblers to come from different countries, they are looking to come up with tax amount on a per-case basis that the player will have to file. The key factor in calculating the tax rate will be based on the country of residence of the foreign gambler. This means that the type and amount of tax gamblers will pay on their winnings will depend on the tax treaties that Japan has with their respective country.
AFP news agency
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Currently, Japan has treaties with 23 countries and states all over the world. According to existing Japanese treaties with the United States, European Union, South Korean and members of the Organization for Economic Cooperation and Development (OECD), gamblers from these regions will have to pay the tax on their casino winnings to their own governments.
This kind of taxation scheme is similar to that of the US, where foreigners can be treated differently, depending on the tax treaties of their countries with the US. Players from countries like China, India and Singapore for example will have to handle their taxes differently. Gamblers from these countries will be subject to Japanese income tax and will have to settle their taxes with the Japanese government before they leave the country.
Despite Japan's initial mirroring of Singapore casino regulations, this is entirely different from their taxation scheme which exempts all gamblers, foreign or local from taxation.