The second place finisher in the World Series of Poker Main Event will face a hefty tax bill when tax time rolls around, as he will be forced to pay just over half of his winnings to the Norwegian government.
Felix Stephensen won $5,147,911 for his second place finish in the tournament this month, but will have to pay out a huge percentage of his money because he fits into a series of loopholes that the government takes advantage of.
The first is that he is registered as a professional poker player, meaning that he is not subject to the standard 27% tax rate on winnings. He is also required to pay that hefty fee because he is a Norwegian citizen, even though he lives abroad in London. Under current Norwegian law, citizens who have lived abroad for less than three years still must pay taxes to the country. Stephensen has lived abroad for two and a half years.
Commenting on the poker ace's tax situation a Norwegian financial expert said, “Poker prizes are specifically mentioned in the ABC of tax regulations. It says that individual prizes of more than 1,000 kroner ($150) are eligible for tax, but there are possibilities to deduct expenses, like starting fees, that relate directly to poker tournaments.”
"For a professional poker player there will be surtax plus the self-employed person's social security contribution, in addition to the 27 percent," the expert explained. "His income will be taxed at 50.4 percent. Like all self-employed people, he will get deductions for expenses related to poker playing.”