Powered by Look’s like you earning a healthy some of money, did you know that online sports betting, lottery and horse racing betting is legal in South Africa, below is the list of the top 4 most trusted online sports betting sites, why not take a bet and see whether you can beat the odds. All winnings are tax free. Foreign Nationals and 30% Withholding Gambling Winnings Tax Foreign nationals with US gambling winnings by accident face a different story. These foreign nationals will be subject to 30% income tax rate or lower tax treaty rate because this income is not effectively connected with US trade or business. In South Africa, you don’t have to pay tax on lottery winnings and you don’t have to pay tax on any online gambling winnings, as long as you’re doing so for leisure. Gambling laws in the UK In the UK, the online gambling industry is an extremely lucrative and important part of the economy. The South African Revenue Service has been exploring the possibility of implementing a form of taxation on gambling winnings since the Minister of Finance’s Budget Speech in 2010.

If you have won a lottery prize in South Africa, you might be wondering if your winnings are going to be taxed. You can find out about the laws surrounding tax on lottery winnings on this page, and discover the different circumstances in which your winnings could be subjected to taxes, domestic or foreign.

Tax on Lottery Winnings

Simply put: there is no tax to pay on lottery prizes won in South Africa. Any amount of money won in a lottery is considered capital in nature and therefore exempt from Income Tax. Lottery prizes also benefit from a special exemption from Capital Gains Tax, meaning no tax is payable on lottery winnings of any size.

There is one rare exception to this. If you play the lottery or undertake any form of gambling professionally - and regularly win prizes to the extent that your winnings are your primary source of income - this money will be taxed just like other forms of income.

Even if you do not play the lottery professionally, it is nonetheless recommended that you notify the South African Revenue Service (SARS) of any prize won in order to avoid the chance of being unnecessarily taxed on your winnings in future.

Donations Tax

If you were to distribute any lottery winnings to friends or family, that amount may be subject to something called Donations Tax. Donations of up to R100,000 per year are tax-free, with any amount above this taxed at 20%.

Gambling Winnings Tax South Africa 2019

For example, if you won R9,000 and gave R3,000 to a friend, that donation would be exempt from Donations Tax. On the other hand, if you won R400,000 and gave R150,000 to a friend, the Donations Tax to be paid would be R10,000 (20% of R50,000). It is the donor’s responsibility to pay the tax by filling in an IT144 tax form and submitting it to SARS before the end of the following month.

If you run a lottery syndicate in South Africa, this tax could affect the distribution of winnings to other syndicate members. Lottery tickets can only be owned by a single individual, and not collectively owned by a group. A syndicate is an agreement, outside of the National Lottery, to pool entry costs and split any prizes – meaning the responsibility for sharing prize money with other syndicate members rests with the named ticket holder. If each syndicate member receives more than R100,000, they would be liable to pay Donations Tax.

Taxation Abroad

If you are a non-resident of South Africa and you donate money to a South African resident, the money is exempt from Donations Tax, and neither party would have to pay.

If you play international lotteries from South Africa, there may be tax laws in those countries that come into effect before you receive your winnings. For example, the United States government imposes a 25% federal tax on any Mega Millions prize above $5,000.01, while the jackpot is subject to a 39% federal tax withholding. On top of that, each U.S. state has its own tax withholding on Mega Millions prizes won on tickets bought there.

Tax withholdings are so named because the taxed money is 'withheld' from the winner by the lottery provider in question; if you win the Mega Millions jackpot through a lottery concierge service, the 39% will already have been deducted when you collect your winnings. In the case of withholdings, you do not need to do anything further to honour the tax. Consult a financial advisor for further questions on your responsibility for foreign taxation.

If you were to claim any SA lottery winnings from abroad, you could be subject to taxation in your country of residence. Consult a financial advisor to find out more about the tax laws in your country.

Gambling Winnings Tax South Africa News24

Abstract

Keywords

1. The expected impact of the implementation of International Financial Reporting Standard (IFRS) 16 – Leases
Milton Segal, Genevieve Naik
Journal of Economic and Financial Sciences vol: 12 issue: 1 year: 2019
doi: 10.4102/jef.v12i1.207

Gambling Winnings Tax South Africa 2020

2. Peculiarities of the fair value taxation regime for financial instruments
Warren Maroun
South African Journal of Accounting Research vol: 29 issue: 2 first page: 151 year: 2015
doi: 10.1080/10291954.2015.1006484