Spanish chess Grandmaster and occasional poker player, Francisco Vallejo Pons is distraught after the Spanish tax authorities handed him a Euro 500,000 tax bill in respect of his deposits and winnings in poker games back in 2011.
You read that right – deposits and winnings, but with no rebate on his losses.
Pons it turns out was not as good at poker as he is at chess, and in 2011 he deposited and won around a million Euros in online poker games, but at the end of the day never withdrew any cash from his poker account.
In 2016 he received a nasty shock – a demand for Euro 500,000 in unpaid tax from the Spanish taxman. Pons then found that he was the victim of an old Spanish tax law that imposes 47 percent on winnings in gambling, but gives no relief for a player’s losses.
His timing was bad, because this tough piece of legislation was subsequently amended in 2012 to allow loss rebates…but that was too late for Pons and his 2011 action, and the Spanish tax authorities are apparently determined not to allow any leeway in the demand.
Explaining that the old law was changed a year after he had played, Pons warns: “If you had the bad luck to play in 2011, your life can be destroyed. In an incomprehensible way, they did not apply retroactivity in the new law.
“It seems a macabre joke, but it is not, from that moment begins a snowball that crushes you.
“They [the tax authorities] are perfectly aware, but they have never wanted to consider the losses. They have already seized most of my savings.”
Pons now faces a long and probably costly legal challenge if he hopes to get his Euro 500,000 back from the taxman.