In most cases, the winner does not need to pay taxes independently. This duty rests with the tax agent.
The Main Directorate of the State Tax Service in Kyiv region reminds that lottery winnings, valuable contest prizes, or promotional rewards are considered personal income and are subject to taxation under the Tax Code of Ukraine.
This is reported by the Prompolitinform portal, citing information from the Main Directorate of the State Tax Service of Kyiv region.
In most cases, the winner does not need to pay taxes independently. This duty rests with the tax agent.
Thus, if an individual wins money in a lottery, the lottery operator acts as the tax agent. They are responsible for calculating, withholding, and remitting the personal income tax at a rate of 18% and the military levy at a rate of 5% from the winning amount to the state budget.
A similar procedure applies to prizes received during contests, advertising campaigns, sweepstakes, and other promotional events. In these cases, the event organizer performs the role of the tax agent, independently withholding personal income tax and the military levy from the winner’s income and remitting them to the budget.
For example, if a promotion winner wins 10,000 hryvnias, the organizer will withhold 1,800 hryvnias in personal income tax and 500 hryvnias in military levy. Consequently, the winner receives the prize amount after these deductions, totaling 7,700 UAH.
Specific taxation rules also apply to non-cash prizes. If a winner receives a smartphone, home appliances, a tourist trip, or a car, the value of such a gift is subject to taxation. To determine the tax base in such cases, a special coefficient provided by Clause 164.5 of Article 164 of the Tax Code of Ukraine is applied.
Therefore, regardless of whether the prize is received in cash or as a valuable gift, such income is subject to taxation. At the same time, in most cases, all necessary calculations, withholdings, and tax transfers to the budget are handled by the organizer of the sweepstakes, contest, or the state lottery operator.
Collage: Main Directorate of the State Traffic Safety Administration of Ukraine in the Kyiv region
