If you intend to play the lotto, or if you have already played the lotto , you will want to know what you are “actually getting and what you are not. After all, if you have to pay taxes you will get less money than you might think. And unfortunately, in many countries , you will have to pay at least something in taxes on your winnings.
There are actually quite a few countries where you don’t have to pay any taxes even on your lotto winnings. For example, Australia, Canada, Finland, Germany, Ireland, New Zealand, South Africa, the UK and several European countries do not charge any lottery winnings tax.
All you have to do is win the lottery in one of these countries. If you do, you receive the lump sum payment immediately. And you don’t pay taxes at all. This makes it an even bigger win for you, regardless of the amount of the prize. But keep in mind that this only happens if you live in that country and win the lottery there.
Countries where you have to pay taxes on lottery winnings
Other countries, including the United States, require the payment of lottery winnings taxes. In fact, you could be paying a lot of taxes when the government is done taking their share. And that’s why the awards in the United States, in particular, are rarely what they seem. Even a big prize can be reduced by quite a bit.
For example, many people choose to take the smallest payment so they can get their money all at once rather than getting paid every year. If you do this in the US, the government can step in and take a portion of the lump sum straight from the top. And then you have to pay regular taxes on it as well.
A winnings of $ 100,000 in the United States could end up only offsetting $ 70,000 after all taxes and fees were subtracted (and the amount that was taken off the top for the privilege of getting your money all at once) .
What if I win the lotto in another country?
If you are playing the lottery in a country other than the one you live in, you must follow the laws of that country. If they charge taxes to winners on lottery winnings, you will have to pay the same taxes. If they do, in most cases your home country won’t require you to pay additional taxes on the money, which helps you save a little more.
If the country you win doesn’t charge taxes, however, you can still receive taxes from your country. This could be in the form of income taxes at the end of the year or anywhere else, depending on which country you live in.