BIR: Jackpot prize from casinos, gambling subject to withholding tax
The BIR mandates a 20% final withholding tax on jackpot prizes from casino and gambling activities, with a higher rate of 25% for non-residents.Summary
The Bureau of Internal Revenue (BIR) has clarified that jackpot prizes from casinos and other gambling activities are considered 'winnings' and are subject to final withholding tax. This ruling, detailed in Memorandum Circular No. 57-2026, applies to both residents and non-residents. For residents, the tax rate is 20% on the gross amount of the prize. Non-residents not engaged in trade or business in the Philippines face a higher rate of 25%. The BIR issued this circular to address inquiries about the definition of 'winnings' and to ensure consistent tax application, equity, and revenue protection as the Philippine gaming industry grows under regulatory frameworks like the Philippine Amusement and Gaming Corp. and various economic zone authorities.
(Source：Sunstar)