Gambling Winnings Tax South Africa

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Tax on lottery winnings in South Africa. The short answer is no, lotto, cash winnings, prizes and the sale of these type of tickets are not subject to tax in South Africa if they are conducted or authorized within the laws of South Africa. Online casinos are perhaps the second most popular form of online gambling in South Africa that can win you a massive jackpot, and it’s not the first time someone has managed to cash out a huge sum. Hence, it is normal to ask, even in these scenarios, whether tax is applicable on these winnings.

There seems to be a great deal of confusion when it comes to Tax on lottery winnings in South Africa. We’re going to set the record straight to clear things up, so that you don’t need to be confused when you hit the big jackpot!

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Tax on lottery winnings in South Africa

The short answer is no, lotto, cash winnings, prizes and the sale of these type of tickets are not subject to tax in South Africa if they are conducted or authorized within the laws of South Africa. The Lotto is licensed by the government and is essentially tax free. However if you were to win the lotto a few times and it becomes your primary source of income then you might be paying tax at some point. Our gambling tax article covers this nicely so give that a look if you are winning on a regular basis.

Declare lotto winnings to SARS

Gambling Winnings Tax South Africa 2018 Gross Income

While there may not be a tax on your windfall you should do the safe thing and still report it to SARS. As mentioned winnings are excluded from capital gains tax (CGT). However, the individual would need to declare the winnings to the South African Revenue Service so that they know where that lump sum that hit your bank account came from. Moneyweb have an interesting article detailing this.

What about the rest of the world, do they pay a tax on lotto winnings?

It varies from country to country and one of biggest mistakes people make is to apply the USA’s lotto tax rules on South Africa. We consume ton’s of USA TV shows and news so it’s a common mistake to think that tax on lottery winnings in South Africa is a thing. In the USA you get the option of either having your winnings paid out in a lump sum that is taxed depending on the state. Or having monthly payments made to you for the next 29 years that are tax free.

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I’ve won the lotto but I’m unsure what to do about my tax

If you’ve hit the big one the first thing you should do is contact a tax attorney. We’re sure you would be able to afford this with your newly acquired millions! They’ll be able to put your mind at ease and explain what you should do going forward. They are the experts after all!

We hope you enjoyed our Tax on lottery winnings in South Africa post, if you have any questions or feedback then let us know in the comments below. If you’d like to know about some of the bookmakers where you can take actual lotto bets then check this article out.

How to spend your lottery winnings

Gambling Winnings Tax South Africa On Property Sales

Here are some great tips on how to manage your lotto winnings.

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Get Legal Advice

At the end of the day it’s important to speak to a tax attorney or a lawyer should you hit the big one. Yes there will be fees to pay but you’ll get the most up to date legal advice regarding taxation on your winnings. It’s always best to speak to a professional as the laws do change from time to time.

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We’ve listed the contact details of several tax attorneys and accountants below, should the need arise. It’s worth firing off an email with a question if you have one, as most law firms will be happy to give some quick advice. If there is anything you’d like to know then also feel welcome to leave us a comment below.

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