Won UAH 10,000 in a prize draw: how much money you will receive after paying taxes
Receiving a cash prize, a new smartphone, a tourist trip, or even a car for winning a lottery, contest, or promotional campaign is always pleasant. However, such income also entails tax obligations.
At the same time, in most cases, the winner does not need to calculate and pay taxes independently — this is done by the organizer of the draw or the lottery operator. We explain which winnings are taxable, what rates apply, and how it works in practice.
Winning a lottery, a new smartphone for winning a contest, or a car received in a draw is taxable income for an individual.
The Tax Code of Ukraine classifies winnings and prizes as taxable income for individuals. At the same time, in most cases, it is not necessary to pay the tax and military levy independently.
How lottery winnings are taxed
If an individual wins money in a lottery, the tax agent is the lottery operator. They calculate, withhold, and transfer to the budget the personal income tax at a rate of 18% and the military levy at a rate of 5% from the payment amount on behalf of the individual, regardless of the form and method of payment of such funds.
Who pays taxes on winnings from contests and promotional campaigns
When income is accrued in the form of winnings received in contests, promotional campaigns, draws, and other promotional events, the tax agent is the organizer of the respective event.
The organizer independently withholds the personal income tax and military levy and then transfers them to the state budget.
Example of tax calculation on a winning
If the winner won UAH 10,000 in a promotional campaign, the organizer will withhold:
- UAH 1,800 personal income tax (18%);
- UAH 500 military levy (5%).
After withholding taxes and levy, the winner will receive the remaining amount.
How non-cash prizes are taxed
Special attention should be paid to non-cash prizes. If the winner receives a smartphone, household appliances, a tourist trip, or a car, the value of such a prize is taxable.
For tax calculation in this case, a special coefficient defined by the Tax Code of Ukraine is applied.
What winners should remember
Regardless of whether an individual received winnings in cash or as a valuable gift, such income is subject to taxation. At the same time, the obligation to calculate, withhold, and pay personal income tax and military levy usually lies with the lottery operator or the organizer of the contest, promotional campaign, or other draw.
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