With regard to casinos to be included in integrated resort facilities, the government and ruling coalition are making arrangements to create a system to withhold taxes from the winnings of visitors to Japan. The plan will require casino operators to keep records of purchases of chips and amounts of chips converted into cash to prevent tax avoidance by gamblers.
The ruling coalition is looking to include this plan in their tax system reform outline to be compiled in December.
Casino winnings by individual users will basically be categorized as "temporary income." From the amount of the payout to gamblers, costs will be deducted from, for example, the price of chips bought upon entering the casino or at gambling tables. The remaining amount will be subject to income tax.
There are some concerns, however, such as that chips could be exchanged between relatives or acquaintances depending on game results to make the amount of the payout seem smaller. In light of this, the government intends to develop a system to ensure appropriate declarations.
Basically, the government and ruling bloc are considering introducing a system in which casino operators keep and store records of each individual gambler's purchase of chips upon entering the casino, amount of chips converted into cash when leaving, amount of chips purchased at the gambling tables and results of each game. These records are to be provided to each gambler.
In principle, taxes will be withheld from the casino winnings of gamblers such as foreign tourists to Japan. Without a withholding system, it becomes difficult for Japanese tax authorities to conduct tax and other probes on foreign visitors that leave Japan with their winnings.
According to tax conventions signed with overseas tax authorities, Japanese authorities can impose tax on people visiting from countries such as China and Thailand for their casino winnings. However, people from the United States and South Korea, for example, will be taxed by their country's authority.
Establishing integrated resort facilities with casinos is a main measure of the government's growth strategy after the 2020 Tokyo Olympics and Paralympics. After next year, the government will formally start work to select up to three prefectures where such facilities will be located.
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