Receiving a large sum as a gift or winning a lottery is the cherished dream of any person, both a gambler and a non-gambler. Receiving such a “gift of fate” causes euphoria and joy. But do not forget that the larger the amount of such a gift, the greater the amount you will have to pay as tax to the state budget. Even the simplest lottery game is a kind of obligation, since in addition to the rules and rights of the party, it also contains obligations towards the winner. Ndeposit for winnings equal to 13%. According to current Russian legislation, before the amount is credited to an individual’s account, it is necessary to pay what is required of lottery services.
How to calculate tax on winnings?
Amounts of funds, or proceeds, from received gifts from individuals and victories in lottery drawings are subject to income tax in accordance with the current legislation of Russia. For residents of Russia, the tax rate is the income tax rate - 13%, for citizens who stay in Russia for less than 183 days per year, the tax rate is 30%. For example, if a Russian resident wins 100,000 rubles in the lottery, income tax is deducted from the winnings at a rate of 13%, and the citizen will receive 87,000 rubles “net”. For an individual staying in Russia for less than 183 days a year, the net income in our example will be equal to 70,000 rubles, the tax on winnings will be 30,000 rubles.
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When receiving a cash receipt such as a gift or lottery winnings, a citizen should indicate the amount of income received in the tax return, which is prepared according to the approved form Z-NDFL.
How to fill out the 3-NDFL declaration for winnings
So, in case of independent payment of tax on money won or prizes, an individual must submit a 3-NDFL declaration to the tax authorities. For 2022, a new form 3-NDFL is used. The deadline for sending the report to tax authorities is April 30 of the year following the reporting year. That is, income received in 2020 must be reported no later than April 30, 2022.
We will give some tips on filling out the 2022 personal income tax return from lottery winnings.
- If there is no data on other income, property, social, etc. deductions, you need to fill out and submit the title page, sections 1 and 2, appendix 1, appendix 4.
- The title page contains information about the reporting individual.
- Appendix 1 is filled out based on the income received - the value of the prizes, the amount of money, data on the source of payment.
- A non-taxable amount of 4,000 rubles is entered in Appendix 4.
- Data from the applications is transferred to section 2, where the base and amount of income tax are calculated.
- Section 1 indicates the amount of tax payable to the budget, broken down by KBK and OKTMO.
Does it make a difference whether a gift is received from an organization or an individual?
Of course, the source of income is important. In case of receipt of proceeds from a legal entity and individual entrepreneur, the responsibilities for deducting and paying tax on winnings are assigned to the organization/individual entrepreneur. In general, the recipient of such a gift does not need to fill out a tax return.
Please note that cash receipts in the form of a gift are not subject to income tax / winnings tax if their amount is less than 4.0 thousand rubles per year.
It is necessary to fill out a tax return in the case of gifts from an individual, not a relative, for you:
- property in the form of real estate;
- motor vehicle;
- shares
At the same time, relatives in this case are recognized as: husband/wife, parents, children, grandparents, siblings and half-brothers and sisters (according to the Family Code of the Russian Federation).
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When receiving a lottery winnings or a gift from citizens, a completed tax return in form Z-NDFL must be submitted to the local tax authorities by April 30 of the year following receipt of the winnings/gift; and no later than 15.07. The year following receipt of the winnings/gifts, the calculated amount of tax must be paid into the budget.
Foreign lotteries
Quite often, citizens of the Russian Federation purchase tickets for foreign lotteries, hoping for a large currency win. It is important for players of foreign lotteries to know that the winner will need to pay tax at the rate accepted in the organizing country. That is, if you play the lottery in Spain, then you are obliged to give 20% of the income received to the Spanish budget. However, amounts up to 2,500 euros are not subject to taxation.
The tax rate of winnings for lottery participants in different countries differs significantly from the Russian Federation, both up and down. When playing in Italy, you will have to pay 6%, in the Czech Republic - 20%, in Bulgaria - 5%. American lotteries are subject to the highest tax – 25%. This fee is federal and may increase depending on the state in which the ticket was purchased. You will have to pay an additional 25% in Michigan (4.35%), Illinois (3%), New Jersey (10.8%).
In some countries there is no tax on lottery winnings. Such countries include Australia, Germany, Great Britain, Finland.
The winner of a foreign lottery pays tax to the organizing country only if an agreement on the absence of double taxation has been concluded with this country. If there is no such agreement, then you will have to pay the fee twice - at the domestic (13%) and foreign rate. True, such cases are quite rare - the corresponding agreements have been concluded with the majority of developed countries.
Tax on winnings - payment details
If you need to clarify information or obtain up-to-date information on paying tax on winnings, you should refer to the Tax Code of the Russian Federation, Article 228. Please note that not only lotteries, but also gambling, sweepstakes, etc., are subject to tax on winnings, regardless of whether this organization is private or not.
In the event that the payment of tax is assigned to the winner, and he, in turn, did not deposit the funds in a timely manner, the lottery winner receives a fine, the minimum amount is 100 rubles.
As for lotteries from large retail chains, when drawings of money and prizes are made between customer checks, and the goal is to attract as many customers as possible, then winnings from such a lottery are not subject to tax on winnings if the amount is less than 4.0 thousand rubles. If the winnings amount to a large amount (it does not matter whether it is money or the value of the prize), then a tax on winnings is levied at a rate of 35% on the difference in the value of the prize/winnings and 4.0 thousand rubles. Tax on winnings is paid by the winner himself. However, when winning a cash gift, a situation is possible when the retail chain pays the tax itself, and the winner receives a “net” win.
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A won prize, for example a car, can be donated only after payment of the due tax amount and subsequent registration of ownership.
Prizes in promotions
Quite often, large shopping centers and hypermarkets give away valuable prizes and gifts to customers. These events are called incentive lotteries, their goal is to increase the loyalty of existing customers and attract new customers.
Are winnings in such promotions taxable? Yes, having received a cash reward or product, you, as the winner of the drawing, are required to transfer part of its cost to the budget. The tax rate in this case is 35% . Moreover, if the winnings are less than 4,000 rubles, then they are taxed at a rate of 0%, that is, nothing needs to be transferred to the budget. The same amount (4,000) is deducted from the base when taxing other prizes (see example below).
If you win a cash prize, then you do not need to declare income, because according to the law, all obligations to pay the fee are assumed by the organizers of the events. “In your hands” you receive a “gift” in the form of 65% of the total amount.
A different situation arises when the prize in the promotion is a material thing - household appliances, real estate, a car. Since you do not receive any funds in your hands, you will have to declare income and pay the fee yourself. The basis for taxation is the value of the winnings, which is documented by the organizer of the promotion.
If you think that the hypermarket has inflated the cost of the TV you won (washing machine, car, etc.), then you have the right to turn to the services of an appraiser. For a fee, specialists from an independent company will evaluate the winnings and draw up a report indicating the actual market value of the prize. Tax must be calculated from this amount. The appraisal act itself will serve as confirmation of the price of the goods if questions arise from the Federal Tax Service. Please note that it is advisable to contact an appraiser if you receive a large prize (apartment, car, etc.), since in this case you incur additional costs for the company’s services. Submission of the declaration and payment of funds to the budget is carried out in the general manner and according to the deadlines described above.
Example No. 2: In March 2022 Stepanov V.L. I purchased a mobile phone from the Techno Paradise store. In April 2022, Techno Paradise held a TV draw among its customers, the winner of which was Stepanov. The cost of the TV is 21,300 rubles. Let's calculate how much winnings Stepanov must pay to the budget?
As you know, winnings up to 4,000 per year are not taxed. Therefore, Stepanov will pay the fee from the amount minus 4,000: 21,300 – 4,000 = 17,300.
The fee is paid at a rate of 35%, Stepanov will pay to the budget: 17.300 * 35% = 6.055
You should not hope that the tax service will not find out about such a win. The Tax Code obliges the distributor of prizes to provide the tax office with information about the recipient of the prize and the impossibility of withholding tax on it. Therefore, most likely, the Federal Tax Service has information about a potential taxpayer from whom the tax authorities expect a declaration and payment of tax.
Tax on lottery winnings 2022
Not every lottery win requires you to pay tax. If the total amount of winnings for the year is less than 4 thousand rubles, personal income tax is not charged. If more, the tax is calculated using the formula:
Tax = (winnings - 4 thousand rubles) x 0.13
It turns out that 4 thousand is not only the minimum from which taxation begins, but also a kind of tax deduction. It is by this amount that the state will reduce the amount of winnings in order to calculate the tax base. Moreover, the winnings can be anything - from a lottery, from a bookmaker, from a promotion, or from an employer.
You need to be careful with the bet: it differs depending on where the winnings are received. For example, for lotteries there is a regular personal income tax of 13%, and for promotions - all 35%. It is important not to confuse these two plays. The lottery is always organized by the state. Its implementation is entrusted to operators - companies chosen by the authorities. The lottery ticket will always indicate the operator and authority, as well as the ticket number and price. If this information is not on the ticket, it is not a lottery ticket: it will have a rate greater than 13%.
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Who transfers personal income tax from lottery winnings to the budget and in what order?
The size of the winning amount is determined by who will transfer personal income tax to the budget:
- Amount less than 4000 rub. — There is no need to transfer personal income tax, since para. 8 clause 28 art. 217 of the Tax Code of the Russian Federation exempts this amount from tax. However, if in a year a person is lucky enough to become the winner of several lotteries and the total amount of winnings exceeds the specified threshold, then the personal income tax will have to be paid independently.
- Amount over 4,000 and up to 15,000 rubles. inclusive - income tax is paid by the gambling enthusiast himself (subclause 5, clause 1, article 228 of the Tax Code of the Russian Federation) for the next year after winning by July 15 at his place of residence/registration.
- Amount from 15,000 rub. - in this case, personal income tax is calculated and transferred to the treasury by the tax agent, who is the organizers of lotteries, gambling, sweepstakes, etc. (Article 214.7 of the Tax Code of the Russian Federation). The money is transferred to the winner minus tax.
NOTE! It is not the entire amount of gambling winnings that is subject to income tax, but minus the bet made.
Let us note that if an individual becomes the owner of a valuable prize, then in any case he will have to pay the tax himself.
Tax on car winnings 2022
For tax legislation, it is not the prize itself that is important, but what the person won it with. If the car was won for a prize in a competition or non-advertising show, the rate of 13% applies. But for the winners of promotions, the tax is much higher - 35% (for more details, see the paragraph below).
The state encourages participation in high-status sports competitions by not taxing winnings at all. For example, winners of the Olympics, World and European Championships do not pay personal income tax to the treasury at all for the car they win.
Tax by type of winnings
Tax on foreign lottery
If a resident of Russia is lucky in a foreign lottery, then there may be one not very pleasant moment. Namely double taxation. You will give part of the winnings to the treasury of the country that is holding the drawing, and then the Russian tax service will also issue you an invoice.
In order not to be left without most of your winnings, you need to understand two points:
- Firstly, there is a list of countries with which an agreement has been signed to eliminate double taxation, that is, you pay the tax only once.
- If fortune smiles on you in a country that is not included in this list, in this case, many companies offer their clients to remain incognito. Whether to do so or not will depend on your honesty. You should always remember that tax evasion may incur administrative or criminal penalties.
Tax on winnings from a bookmaker (fonbet, betting league and others)
Over the past year, bookmakers have become very popular in the country; this surge occurred largely due to the fact that betting entered the online space. And of course, in Russia there is a tax on winnings at a bookmaker’s office.
This is also important to know:
Property deduction when selling an apartment, features of receipt in 2019
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In 2022, changes were made to the Tax Code, according to which winnings from a bookmaker's office are taxed if the amount is 15 thousand rubles. and higher. In this case, the person will receive the amount won minus 13%. If the winning amount is less than 15 thousand, the bookmaker pays it to the client in full, but at the end of the year, this citizen will have to independently make a contribution to the tax service.
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Tax on casino winnings
And although casinos are prohibited on the territory of our country, except for specially designated gaming areas, there are online roulettes and sweepstakes, and so far neither the Criminal nor the Administrative Code has a significant impact on their activities. Most online casinos are registered offshore, and their turnover amounts to billions.
The tax on casino winnings in Russia is also 13%, but payment here is on the conscience of the player, and most often people go to all possible tricks in order not to give the due portion to the State. If you take legal machines, then the amount less than 4,000 rubles is not taxed. If the size of the winnings is larger, then you must share and separate the required 13% with the state.
Tax on car winnings
How to pay tax on winning a car or an apartment, because you can’t separate part of the living space and give it to strangers? The same rate applies here as for a cash win, it is either 13 or 35% of the value of the win.
The cost of the prize won is reported by the organizer of the drawing and, of course, confirms this information with documents. If the lucky ticket holder does not have the amount to pay the tax, he can put his prize up for sale and then receive the amount minus tax contributions.
Tax on prizes in promotions
Very often the winning prizes are washing machines, televisions, computers, fur coats and other “clothing” lots. In this case, no tax will be collected from you, but the organizer conducting this drawing will notify the tax office of the income you received and the impossibility of withholding tax. After this, all responsibility and obligation to pay the tax falls on your shoulders.
By law, the rate for advertising sweepstakes is 35%. To clarify the amount, you must also contact the organizer, ask them for a receipt or any document confirming the value of the prize. If you agree with this amount, you always have the opportunity to contact independent appraisers.
What to do if the winnings turned out to be too expensive?
For example, you won a one-room apartment, and the organizer provides you with documents indicating its value of 10 million rubles. Although the market value does not exceed two. There is no time for joy or celebration of victory, because you need to pay a tax on property winnings in the amount of 35%.
This is also important to know:
Property deduction when selling an apartment, features of receipt in 2019
There are several options here:
- Conduct an independent assessment of the value and try in court to prove the fact of an illegal increase in the value of the prize.
- You can also pay this amount, or refuse the winnings altogether.
Tax on winnings from a bookmaker
Like the lottery, winnings from a bookmaker are taxable. His rate - 13% - does not depend on where exactly the person won: in the office of the office, through its website or from an illegal bookmaker who works abroad. But there is a difference in the tax base: its size depends on the amount that the player withdraws from the bookmaker’s account. If the winnings are less than 4 thousand rubles per year, personal income tax is not paid at all.
If from 4 to 15 thousand rubles are withdrawn from the bookmaker’s account per year, the tax base is everything that the person received in total, regardless of the original bet. Let's look at an example:
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- The player bet 7 thousand rubles into the bookmaker's account. Fortune smiled on him, and the winnings amounted to 12 thousand rubles. Formally, the player’s profit is 5 thousand rubles, but according to the law, the winnings amount to the entire amount that was withdrawn from the account - that’s 12 thousand rubles.
In this case, the tax authorities are not interested in the fact that part of the money in the account is the bet that the player himself contributed. The tax will be calculated according to the formula:
Tax = (amount of withdrawals for the year - 4 thousand rubles) x 0.13
People who play frequently and with several bookmakers pay tax to the state for all bets and winnings on them. To do this, you need to add up all withdrawals from accounts in all offices for the year, subtract 4 thousand rubles from them and calculate 13%. Please note: this formula works if the player received a total of up to 15 thousand rubles from bookmakers.
But if more than 15 thousand rubles were withdrawn from the account in a year, the tax base is the real gain, i.e. difference between withdrawal and deposit amount:
Tax = (withdrawal amount for the year - deposit) x 0.13
A deposit refers to the money that the player initially deposited into the bookmaker’s account, i.e. put. Why does the taxation procedure change in this case? The fact is that if you win more than 15 thousand rubles, the offices become tax agents in the eyes of the tax authorities. This means that the bookmakers themselves are responsible for withholding personal income tax, and the player can only receive the money: the tax will be paid even before the funds are withdrawn.
The amount of income tax on winnings in Russia
Regardless of whether you hit the Jackpot, won a car or a trip to Paris, in any case, a certain tax will be deducted from you on your winnings. The tax on lottery winnings in Russia and the method of payment depends on several factors. This is the amount of the winnings, how the drawing was carried out, and the size of the tax is influenced by the citizenship of the winner. Let's consider all the factors in more detail.
35 percent tax on winnings in incentive lotteries
This tax applies to winnings from the promotional lottery. By incentives we mean those draws in which participation is free, they are usually held for advertising purposes.
Example
For example, a certain trademark decided to make itself known and hold a lottery in a large shopping center. The entire draw is held at the expense of the organizer, and in fact, the winner, without spending anything, receives, for example, a brand new phone or a trip to Turkey. But, in order to collect his winnings, he will need to pay 35% of the market value of the prize.
Tax on winnings 13% in lottery draws
In Russia, all winnings from lottery drawings are subject to a rate of 13%. It is at this rate that all the most popular state lotteries work, these are:
- Gosloto “6 out of 45”,
- Golden Key,
- Lotto million,
- First national lottery
- Lottery "Victory"
- Gosloto “5 out of 36”,
- Gosloto “7 out of 49”,
- Golden horseshoe.
Tax on winnings 30% for non-residents
Tax rates of 13 and 35% apply only to citizens of the Russian Federation. If the lucky winner of the prize turns out to be a citizen residing temporarily in Kazakhstan, or in Belarus and Ukraine, then the tax for him will reach 30%. This applies to all non-residents.
This is also important to know:
Property deduction when selling an apartment, features of receipt in 2019
Does the tax rate depend on who conducts the drawing - a state or non-state lottery?
In this case, government support will not affect the tax rate in any way. All types of lotteries are divided strictly into two parts: incentive lottery (promotional, advertising) - 35% and dangerous lottery (when a person invests a certain amount in purchasing a ticket) - 13%. The organizer is not important here.
Tax evasion in Russia
Winning a jackpot is always a pleasure, and you especially don’t want to share with him when your lucky ticket shows a sum of six zeros, and you also want to keep the small prize in its entirety. But, if a lottery winner evades declaring income and paying tax on winnings, then the legislator has provided penalties for him:
- For tax evasion - 20% of the calculated amount.
- If the court finds that a person intentionally failed to fulfill tax obligations, the fine is doubled and amounts to 40%.
- In addition to the specified penalties, a penalty is charged for each day of delay, the calculation of which depends on the refinancing rate.
- Undeclared income is also subject to a fine of 5% for each overdue month (but it cannot be less than 100 rubles or exceed 30% of the tax amount).
Tax authorities have the right to collect tax on lottery winnings forcibly by court decision, for example, by sending a writ of execution to the accounting department of an enterprise, according to which deductions will be made from the citizen’s salary.
The amount of punishment directly depends on the amount of winnings. The defaulter will face administrative penalties up to 100,000 rubles. If a citizen of the Russian Federation has not reported winnings from 100 thousand to 1 million rubles, then his case will be considered criminal and will entail punishment in the form of a fine or seizure of property. If the hidden winnings exceed a million rubles, the “lucky one” will face imprisonment for up to 1 year.
In order to avoid unpleasant consequences, when receiving winnings, one should not forget about the existence of obligations to the state to pay tax.
Is it possible not to pay tax or at least reduce it?
Paying income tax is the direct responsibility of a citizen of the country. Otherwise, you voluntarily break the law and will be held accountable for this offense. The tax can be changed downward, but of course not by much. Clause 28 of Article 217 of the Tax Code of the Russian Federation states that prizes not exceeding 4,000 rubles received in total during the year are exempt from taxation.
