SOUTH AFRICA Are you required to pay tax on Gambling and Lottery winnings in South Africa? 4 years ago Samuel Post Views: 1,083 Have you won a big lottery jackpot in South Africa recently? Or are you constantly dreaming about the day you cash out a huge prize? Amidst all the excitement and dreams, you might be wondering if the government is going to tax your winnings and take a big chunk of it away from you, which let’s be honest, it probably dampens your excitement a little bit. But worry not, in this short article, we will get you acquainted with the taxation laws in South Africa surrounding gambling and lottery winnings. Lottery winnings Gambling and lotteries are a big thing in South Africa. If we talk particularly about online gambling, a great multitude of people indulge in it, either as pastime, or in the hopes of striking it rich someday. Well here’s some good news for you; any prize money that you win from the national lottery in South Africa will be considered as capital and you will not be taxed on it. Any such win will also be excluded from the capital gains tax. However, it’s important that whenever you win lotto prize money in South Africa, you proactively declare it to the SARS (South Africa Revenue Services). Hence, any such prize money, no matter the amount, must be clearly stated in the tax return, mentioning that it should be treated as non-taxable gains for the pertinent taxation year. And that you are not bound to pay taxes on it. Gambling wins 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. Well, in order to answer this question, we need to understand that there can be two potential scenarios: When the gambling activity is purely for pleasure or recreation. In such a case, the activity will be considered a hobby and not something you do with the idea of making a consistent profit from. Therefore, the winnings will be treated the same way as the lotto winnings and considered as capital, not subject to any capital gains tax or any tax in general. Regardless, it should still be declared. Almost 95% of gambling and casino winnings fall into this category. In the event that the gambling activity is carried out as a scheme, or done solely with the aim of registering some regular profit, you will no longer be able to consider it as capital and will be bound to pay tax on it to the South African government. This type of tax is applicable to the professional gamblers in the country. Workplace related winnings There could also be winnings directly related to your workplace, for instance, an amount won through some competition at work. The South African taxation laws have a special inclusion under the definition of gross income, clearly stating that any amount received for services provided, even if the concerned task is voluntary in nature, must be accounted under gross income, and paid tax on. Hence, whenever employees get any remuneration related to their work, for instance, best employee prize, it must be considered gross income, and accounted for as remuneration given by the employer for the services. In case this prize isn’t in terms of cash, its value must be calculated and accounted for as gross income. But if the awarded prize doesn’t have anything to do with work, for example, a lottery win at an old people’s home, magazine competitions etc., the money will be considered capital in nature and will not be taxed. Source: rnews.co.za About Post Author Samuel I am a journalist specializing in gambling in Africa and around the world. I am particularly interested in stories about games and casinos. See author's posts SamuelI am a journalist specializing in gambling in Africa and around the world. I am particularly interested in stories about games and casinos. Facebook Twitter LinkedIn Email Print Tags: gambling tax, jackpot lottery Continue Reading Previous The most popular video games in South AfricaNext Betway steps into the Esports arena More Stories LOTTERIES SOUTH AFRICA 10 biggest lotto payouts in South African history 2 hours ago Samuel ONLINE SOUTH AFRICA SOFTSWISS unveils South African iGaming market overview 1 day ago Samuel ONLINE SOUTH AFRICA WA.Technology Unveils Next-Gen iGaming Solutions at BiG Africa Summit 2024 5 days ago Szarlot EXPERTS SOUTH AFRICA SiGMA Africa 2024: Reshaping South Africa’s igaming landscape 1 week ago Samuel EXPERTS SOUTH AFRICA SiGMA Africa 2024: Explore SiGMA’s Cape Town summit 1 week ago Iwo Bulski EXPERTS SOUTH AFRICA EGT Digital to showcase slots, instant games and betting platform in SIGMA Africa 1 week ago Iwo Bulski EXPERTS SOUTH AFRICA SiGMA Africa’s second edition set to take place in Cape Town in March 2 weeks ago Iwo Bulski BETTING SOUTH AFRICA Navigating the vibrant world of online sports betting in Africa 3 weeks ago Szarlot ONLINE SOUTH AFRICA Exploring the surge in SA’s online betting market 3 weeks ago Samuel ONLINE SOUTH AFRICA Is it time for South Africa to properly regulate online casinos? 3 weeks ago Samuel ONLINE SOUTH AFRICA SA Gaming to unveil its latest products at SiGMA Africa 2024 3 weeks ago Iwo Bulski CASINO SOUTH AFRICA A comparative analysis of land casinos, online casinos in South Africa 2024 3 weeks ago Szarlot Leave a Reply Cancel replyYour email address will not be published. Required fields are marked *Comment * Name * Email * Website Save my name, email, and website in this browser for the next time I comment. Δ This site uses Akismet to reduce spam. Learn how your comment data is processed.