There is such a duty
Participation in a lottery/gambling/bookmaker/totalizator may result in you receiving a prize or a certain amount of money from the organizer. As a general rule, personal income tax on winnings in 2020 must be transferred to the treasury.
But what the personal income tax will be when you receive a win, and whether there will be any at all, depends on its final amount (the value of the prize in monetary terms).
In addition, who pays personal income tax on lottery or gambling winnings to the budget depends on the amount of winnings:
- the winner himself;
- tax agent (must calculate personal income tax on the amount of winnings for each fact of income issued separately).
https://youtu.be/jSTyLADm4FM
What else
It should be noted that the calculation and payment of tax on lottery winnings in amounts up to 15 thousand rubles will still remain on the conscience of the taxpayer (player). It's up to you to file a tax return or not, to pay tax on your winnings or not to pay. Whether the tax office will be able to establish the fact that you received the winnings is, of course, a question. Of course, if you set yourself such a goal and desire, then you will agree that it is possible! But, apparently, all these legislative innovations are in one way or another connected precisely with this problem.
Winning RUR 15,000+: who are the tax agents?
According to the law, which has been in force since 2020 in a new edition (No. 354-FZ dated November 27, 2017), personal income tax on lottery winnings in 2020 pays:
- lottery operator or distributor;
- organizer of gambling in bookmakers and sweepstakes.
The condition for recognizing them as tax agents is that the individual received from them winnings in the amount of 15,000 rubles or more (clauses 1 and 2 of Article 214.7 of the Tax Code of the Russian Federation). Only in this case do they calculate, withhold and transfer personal income tax from winnings and prizes to the treasury.
Winnings or prizes from participation in a gambling game are subject to personal income tax minus the bet made by the future winner.
When to transfer money to the tax authorities account
No later than July 15 of the year following the expired tax period.
For example, in the past 2020 you successfully played the lottery (for example, using popular lottery systems) and you had several winnings. Of all your winnings, you select only those whose size is up to 14,999 rubles inclusive (each). Let’s say their total amount is 100 thousand rubles. Subtract 4,000 rubles from this amount. The taxable base will be 96 thousand rubles, the calculated tax on winnings will be 12,480 rubles. You must file your 2020 tax return by April 30, 2020. The tax must be paid by July 15, 2020.
For winnings of 15,000 rubles and above (each) there is no need to submit a declaration. The tax on winnings will be withheld from you by the tax agent (Stoloto) when transferring the money to you. That is, you will receive these winnings into your account minus tax.
Winning 4000 rub. and less: no tax
The law clearly states what amount of winnings is not subject to personal income tax. This is 4,000 rubles or less (paragraph 8, clause 28, article 217 of the Tax Code of the Russian Federation). That is, after receiving such a win, you do not need to do anything for tax purposes.
However, there is an important nuance: we are talking in general about the amount of 4,000 rubles for a maximum of a year. If a person has received winnings several times and after the second time the amount immediately exceeds 4,000 rubles, it’s time for him to think about the personal income tax on winnings in the lottery. This is confirmed by comments from the Ministry of Finance and the Federal Tax Service of Russia.
Also see “Payments and income not subject to personal income tax in 2020.”
Lottery tax
Therefore, the ban applies only to those companies that specialized in issuing lottery tickets. Other participants, for example, private shops and supermarkets, can organize prize drawings by drawing them by numbers, like in a lottery. But such events must take place in accordance with accepted rules, and the winner will have to pay lottery tax for winnings.
Both circulation and non-circulation lotteries can have different forms of release: in the form of receipts, cards, tickets. An electronic version is also available. They can be exclusively Russian or international. Their number, conditions and payment procedure are strictly regulated by the state, since the lottery in Russia belongs to the category of gambling. In addition to specialized firms, some shops and enterprises can conduct lottery drawings. But regardless of type and form, every lottery winning is subject to tax.
We recommend reading: Amount of Income to Receive a Subsidy for Housing and Utilities Payments in Yaroslavl in 2020
Several small wins = Tax
In a letter dated April 11, 2020 No. 03-04-07/23939, the Ministry of Finance (sent by the Federal Tax Service letter No. BS-4-11/7321 dated April 17, 2018) considers a situation that is very likely to happen in life.
Let’s say that each lottery organizer (gambling game, bookmaker), as a potential tax agent, when issuing winnings in the amount of up to 4,000 rubles to the winner, on completely legal grounds, did not withhold personal income tax on the lottery for the tax period. However, it turned out that in total, for all small winnings for the tax period from all tax agents, the legal limit of 4,000 rubles was exceeded.
According to officials, in this situation, on the basis of sub. 4 paragraphs 1 art. 228 of the Tax Code of the Russian Federation, the winner himself calculates the tax to be paid to the treasury in accordance with Art. 225 Tax Code of the Russian Federation. He takes the required percentage of personal income tax on winnings from the amount exceeding the limit. Then you need to submit a 3-NDFL declaration to the Federal Tax Service at your place of registration.
Is a declaration necessary?
If we are talking about a winning in the form of a car, then the winner is definitely obligated to notify the tax authority about the income received and make a payment for good luck.
A declaration in form 3-NDFL is submitted on a general basis, within the period established by state law, from January 1 to April 30 of the following year for receiving income. That is, for winnings in 2019 you will have to report and pay in 2020.
Do not think that the tax office receives information about income only from the person who won a valuable prize. The lottery organizer, in turn, also reports on expensive items offered for winning and provides information about the winners. If the winner does not submit a return, the tax office will hold the violator administratively liable, force him to submit a return and pay a fine of 1 thousand rubles. for late filing of tax reports.
The form can be downloaded, filled out and printed on your computer. You can also buy it at a specialized store or take it from the tax office itself and fill it out handwritten, in block letters, according to the sample.
Reporting documentation can be submitted during a personal visit to the tax office, through a representative, through a notarized power of attorney, using the electronic services of the Federal Tax Service, or via Russian Post.
What is the personal income tax rate on winnings and prizes?
Of course, most of all lovers of easy money are interested in how much personal income tax is due on winnings in the lottery.
Thus, the personal income tax rate on lottery winnings, as well as personal income tax on bookmaker’s winnings, is 13 percent (clauses 1 and 3 of Article 224 of the Tax Code of the Russian Federation). That is, the general personal income tax rate applies to lotteries and similar games.
Please note that personal income tax on winnings from promotional promotions is significantly higher. Thus, personal income tax on winnings in a promotion is 35% for residents of the Russian Federation and 30% for non-residents.
Thus, lottery winnings are subject to personal income tax at a rate of 13 percent. Unless, of course, its size exceeds 4,000 rubles per tax year.
Also see “Personal Income Tax Rates”.
Tax on lottery winnings. Bid
All Stoloto lotteries (for example, the popular 4 out of 20, 6 out of 45, Russian Lotto, Housing Lottery and others) are classified as state , so the tax on winnings for them is 13% .
How to increase your chance of winning the Gosloto lottery →
But for non-residents of the Russian Federation the tax rate is 30% . Therefore, if you live abroad frequently or for a long time, we recommend that you determine whether you are a resident for tax purposes or not.
Who pays the tax
From January 1, 2020, if the winning amount is equal to or exceeds 15,000 rubles, the tax is withheld at the time of payment of the winnings, and the lottery operator acts as the tax agent*.
The tax base, in this case, is calculated by reducing the winning amount by the cost of the bet (ticket). In this case, the tax amount is calculated by the tax agent separately for each winning, which does not allow the tax base to be reduced by the cost of tickets purchased earlier.
It is worth noting that according to the adopted Law, individuals who received winnings of less than 15,000 rubles (but more than 4,000 rubles) are required to independently calculate and pay personal income tax.
What tax should I pay on the prize?
Tax on prizes, gifts and winnings in Russia is paid in accordance with the norms of Chapter 23 of the Tax Code of the Russian Federation - within the framework of income taxation, since such gifts are considered income of an individual derived from sources in the country, as stated in Article 208 and Article 209 of the Tax Code RF.
From the point of view of personal income tax, the tax on profits from prizes is divided into 2 types:
- Winnings and prizes from quizzes, competitions, lotteries, games and sweepstakes not related to promotions.
- Winnings and prizes from quizzes, competitions, lotteries, games and drawings as part of promotions.
According to clause 1 of Article 224 of the Tax Code of the Russian Federation, in the first case, the income of a tax resident is taxed at a rate of 13%. If the winner of the drawing is not a resident, he pays at a rate of 30%. For such income, the value of tax-free prizes is not provided for by tax law.
Important! For winnings not related to advertising of goods, works and services, you need to pay at rates of 13% and 30% for residents and non-residents, respectively, and there is no tax-free minimum for a prize in a promotion.
In the case of promotions, in accordance with clause 2 of Article 224 of the Tax Code of the Russian Federation, a rate of 35% applies, applied by all payers. And according to clause 28 of Article 217 of the Tax Code of the Russian Federation, there is an exemption from personal income tax in the part of the prize not exceeding 4,000 rubles. This non-taxable minimum applies to:
- gifts from individual entrepreneurs and companies;
- the cost of prizes from contests and competitions established on the initiative of the Government of Russia, regional and local authorities;
- the value of winnings from participation in lotteries and gambling.
So, what tax do you need to pay when winning an apartment in a lottery or competition:
- if the lottery or competition is of an advertising nature, then 35% of the cost of the apartment;
- and if you won an apartment in a lottery held without advertising, then the tax percentage will be 13% or 30%; in most cases, a rate of 13% is applied, since most of the Russian population are its tax residents.
How to pay tax on a prize - according to Article 228 of the Tax Code of the Russian Federation, individuals who have received independent income in the form of gifts, prizes and winnings are also required to independently declare them to the Federal Tax Service, calculate and pay personal income tax. To declare income, you must use the 3-NDFL declaration.
Important!
If the donor - a company or individual entrepreneur - withholds and transfers personal income tax to the budget for you, then you do not need to submit anything to the tax office.
It is important to fill out the correct declaration form. So, in 2020, the form adopted for 2020 is filled out. It can be downloaded here . Also, declaration sheets can always be obtained free of charge from the Federal Tax Service.
To reflect income in the form of prizes, the sheet “Appendix 1” is used.
And if you have gifts and prizes that fall under clause 28 of Article 217 of the Tax Code of the Russian Federation, you also need the “Appendix 4” sheet.
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Important!
The declaration must be submitted by April 30 of the year after the year of receiving gifts and prizes.
It can be submitted:
- personally;
- through a representative;
- by letter;
- in the taxpayer’s Personal Account;
- fill it out in a special program and submit it on a flash drive.
Let's look at calculation examples.
Example 1
Ulyanova Inna, as part of an advertising campaign for a digital technology brand, won a tablet worth 25,000 rubles. She is obliged to pay personal income tax on him at a rate of 35%, but can reduce the base by a non-taxable 4,000 rubles. The tax on winning a tablet will be: (25,000 - 4,000) × 35% = 7,350 rubles.
Example 2
Ulyanova Inna won 40,000 rubles in the incentive lottery. She is a resident of Russia, so personal income tax for winning a prize in a competition over 40,000 rubles will be taxed at a rate of 13% and without any deductions: 40,000 × 13% = 5,200 rubles.
Example 3
Ulyanova Inna won a concert ticket worth 5,000 rubles. The drawing was held as part of a promotion. Inna is not a resident of Russia. Firstly, the base will be reduced by 4,000 rubles: 5,000 - 4,000 = 1,000 rubles. And the personal income tax will be: 1,000 × 30% = 300 rubles.
The tax is paid until July 15 after filing the declaration:
- in Sberbank;
- in the Sberbank Online service;
- via online;
- through the taxpayer's personal account.
It is recommended to keep the receipt for 3 years. An electronic check is identical to a paper one.
