How is tax on prizes calculated?

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Many of us try our luck and participate in games of chance. We count on large cash or material winnings. Each of us has dreamed of winning a large sum of money, a car or a house. However, it is worth knowing that you have to pay tax on every prize. I will tell you how tax is calculated on winnings and in what situations we do not have to pay it. You will find out up to what amount of winnings you are exempt from paying taxes to the state treasury. Do you also have to pay tax on material prizes and when the competition organizer will pay it for you.

Tax on winning money
Each win, whether cash or in kind, is an income for the tax office, from which the appropriate amount of tax must be paid. According to Polish law, personal income tax is a flat-rate tax and amounts to 10% of the prize value. Fortunately, the person who won the prize does not have to worry about the tax themselves, because this obligation rests with the organizers of the competition or lottery. The appropriate amount is collected from the winner of the game and transferred to the tax office by the organizer. In the case when the win was a specified sum of money, the winner will receive it reduced by 10%.

Tax on prize in kind
If the prize in the competition was an item, the procedure is different. The winner is obliged to pay the equivalent of 10% of the item won into the organizer's account. Unfortunately, not everyone can afford to pay a egypt whatsapp database sum of money, which is necessary if the prize is, for example, an expensive car. It is worth knowing that winnings in competitions do not have to be settled in the annual PIT return. The tax payer is obliged to settle the tax, and in this case it is the organizer, who must submit the PIT-8AR declaration.

You can avoid paying taxes
It is not always necessary to charge tax on winnings. This happens when a person wins less than PLN 2,280 in a numbers game. However, it is worth mentioning that if this amount is exceeded, the entire amount is subject to taxation, not just the surplus. Anyone who wins no more than PLN 760 in a competition that was announced in the media will also avoid paying tax. Winners of all games in the fields of science, art, sports and journalism are also privileged.

Sale of a prize won in a competition
Many people try to sell their winnings. However, you have to remember that you have to wait six months if you do not want to pay tax on the item you are selling. Officials are increasingly searching auction portals for this purpose and are initiating inspections. You should expect this when selling items you have won. After six months, the Tax Office considers the item you have won to be "used" and its sale will not burden you with the obligation to pay tax.