The amount €630,000 and a quite lengthy jail term is something surely no professional poker pro ever wants to pay for, so next time if you're good enough to win such a hefty amount at any poker event, then the humongous tax you're about to pay is something you should be happy to part with, or else...suffer the dire consequences.
Dragan Kostic, a professional poker player, has lost his appeal to avoid a jail sentence and at the same time he has to pay dearly for not declaring his poker winnings to the tax authorities in Spain.
On September 4, Monday, Spanish media reports said that the Provincial Court of Palma had maintained their earlier Criminal Court of Palma judgement which stated Kostic to be jailed for 18 months plus he has incurred penalties summing up to €630,000 for failure to declare his winnings from the 2011 European Poker Tour Barcelona event.
Dragan Kostic, age 55, from Macedonia but has been a resident of Spain for the past 25 years, won 2nd place in the 2011 EPT Barcelona event, and his prize was €532,000 ($766,438). He was supposed to pay in tax the amount of €230,000, but he chose not to. Along with the unpaid €230,000, he also has to pay a fine of €400,000 with it, and last but not least, a ticket to jail for 18 months.
He at first feigned ignorance when he was questioned by the authorities, saying that he thought the taxes were already deducted by the casino themselves after he cashed in at the tournament. After that, he blamed an accountant who took care of his 2011 tax returns, at that year he claimed a refund of €1,300.
The Criminal Court of Palma did not believe Kostic's story, so he was convicted. He tried on September 4 to appeal to the ruling, but it was unsuccessful. The court had one simple reason to convict him - he could afford to play poker, but he wasn't paying taxes. How can he, without a current job, afford to travel to casinos across the globe and buy into poker tournaments and cash games for literally thousands of Euros each time without having any real income?
A translation of the court ruling said, "It seems the least peculiar that a professional player, who participates in world tournaments and who wins prizes of such caliber, does not worry about the subject of taxation, rather, he does ensure that he knows if there is an obligation or not to [pay tax when that is the only profit and only income he has."
Also, Kostic had included smaller wins of around €20,000 and €7,000 in his previous tax declarations, both were obviously above the €2,500 limit for non-taxable winnings in Spain.