Winning a prize in EuroMillions, the scratch or the lottery may seem like a dream, but not all the amount announced in the Santa Casa games comes to the winner. In Portugal, prizes greater than 5,000 euros are subject to immediate taxation through the seal tax, which means that part of the amount goes directly to the state.
What happens when the award exceeds 5,000 euros
According to Deco Proteste, the rule applies to all social games in the state, including EuroMillions, Totoloto, Totobola, M1BO, Raspadinha, Classic Paths, Popular Bill and even Placard, all explored by the Santa Casa da Misericórdia de Lisbon.
Awards below 5,000 euros are exempt, but from that value a 20% rate is applied to the party that exceeds the limit.
A simple example: If a gambler earns 20,000 euros, it will only receive 17,000 euros. The three thousand euros of difference corresponds to the tax that Santa Casa retains and delivers to the Tax Authority.
Television draws and net value
According to the same source, in television sweepstakes the advertised amount usually corresponds to the liquid, after the taxation has been applied. That is, the winner receives exactly the amount he heard during the program.
In addition, it is important to remember that taxation is also present at the time of purchase. Each bet on social games already includes 4.5% seal tax on the paid price.
What about IRS?
Explains that the awards are not subject to IRS. Therefore, it is not necessary to declare the amounts earned in the annual income statement.
However, those who receive a prize should conserve the statement delivered by the Holy House of Mercy for four years.
In case of tax inspection, this document serves as proof of the origin of the money, since sudden assets of heritage can arouse finance attention.
The essential to retain
Winning may be a source of celebration, but it should be known that the high value prizes are not received in full.
The 5,000 euros rule marks the difference between taking everything home or losing a part to the tax authorities. Before playing, it is worth knowing these rules to avoid surprises at the time of victory.
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