Why are no lottery tickets taxed?

Gambling: Profits are not always tax-free

Profits from gambling do not have to be taxed - at least most of the time. In which cases taxes can be due.

© dpa

Whoever wins the lottery does not have to hand anything over to the tax office. Only when the windfall yields interest does it have to be paid.

The good news first: Anyone who makes winnings from games of chance does not usually have to pay tax on them - no matter how high they are. According to the Federal Chamber of Tax Advisors, the tax office cannot assign income from gambling to any taxable type of income. This applies to both winnings from German state lotteries and income from racing and sports betting. The same applies to income from the Eurojackpot, a multi-country lottery that can be played online: it is tax-free for players who live in Germany.

Interest on profits is taxable

However, lucky people have to be careful when the money arrives in their account and pays interest. The profits are then subject to the withholding tax, which is currently 25 percent. This income must be declared and taxed at the tax office.

Different regulations for lotteries abroad

Anyone who uses offers from other foreign lotteries should inquire about the tax situation in the respective country beforehand. Because here applies: The state in which the lottery is located can set the taxes for the winnings.

Internet gambling: winnings can be confiscated

In the case of games of chance on the Internet, the provider must also have official permission to organize the game of chance. If this is not the case, the proceeds can even be confiscated and a fine can be imposed.

When do profits have to be taxed as income

If the rain of money is directly related to one's own work, the tax office can assign the profits to one of the seven types of income. In that case, the prize money must usually also be stated in the income tax return. This relates, among other things, to artistic, scientific or journalistic awards, for example prize money for an architectural competition, a film or a literature prize.

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Source: dpa

| Updated: Friday, October 11, 2019 9:42 am

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