Poland – Tax on winnings. When do you have to pay?

Winning a competition or lottery can be a great joy. However, you must know that if you win you will have to pay tax. It is a normal income tax, also known as tax on winnings.

Issues of tax on winnings are regulated in the Income Tax Act. In accordance with the provisions of this Act, the tax has to be paid from the revenues that were obtained in competitions, games, and also as prizes during the bonus sale. It does not matter whether this win was paid in Poland or in one of the European Union countries.

The tax on winning is collected on a lump sum. It is 10 percent of the prize value. This means that if we win in a competition or lottery, we do not have to pay the tax alone. The organizer of the lottery, which pays the winnings on its own, will pay 10 percent to the tax office. In this situation, this income does not need to be disclosed in the annual tax return.

When do we pay the tax on winnings?

In certain situations, we will be exempt from the need to settle the tax on winnings. This applies to competitions that are announced and organized in the mass media, as well as special competitions, on a scientific, sporting or artistic level. You do not have to pay a winnings tax if the prize comes from a bonus sale competition, but a one-time win does not exceed PLN 760.

It must be remembered, however, that such an exemption does not apply to persons running a business. For an entrepreneur such a win will be income from operations and it will have to be taxed. Of course, if the prize is related to the business.

You do not have to pay tax on winning from what you can win in games of chance (eg. lotteries), unless, of course, the prize does not exceed PLN 2,280.

The winnings from slot machines and casinos are exempt from tax.

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