When people win the lottery they often get great joy. However, not many people know that this is just the beginning of their path to winning the money. There are many factors standing in the way. Starting from collecting the winnings in special places intended for this, to verifying the winnings, ending with a tax which must be deducted from this winnings. And that’s what you will be able to read today. In each country, the tax percentage differs. Not always when you win a million in the lottery, you will get that million. Also, make yourself some coffee and get ready for some financial gibberish.
However, in the beginning, you need to focus on the fact that lotteries are different. In one, you can win big money with a small financial investment and in another the other way round. Therefore, before you start placing your money, it is worth making sure which lottery gives you the best chance of winning. So, which lottery is the best?
Eurojackpot – a lottery that makes a huge sensation on the European market. It offers its players a weekly 10,000,000 Euro. The biggest win is the amount of 90,000,000 Euro recorded twice in 2015 and 2016.
Powerball – American lottery offering players twice a week a minimum first prize of $ 40,000,000. This lottery is also a record holder in terms of the largest jackpot and the biggest win in history (USD 758 million)
You need to find out where there is a real chance of winning and in what lottery this amount is sufficient for you. There are often lotteries where we can deposit, for example, $ 1 and there is a good chance of winning, but the win is often very low. In others you can also pay a dollar, the amount of winnings is in millions, but the chance of winning is very low, even impossible.
But let’s deal with what happens if you win. Once you have the coveted win coupon in your hand, you will now have a less enjoyable occupation. You must pay tax. Of course, to pay the tax lies with the organizer of the competition or lottery, but it is from your winnings that money is deducted.
In the United States, the tax on winnings is very high. It amounts to 39.6% so if you win one million dollars, you will be charged a tax of 396 thousand dollars. It’s not so cool anymore. This is because in the United States the win is treated as income, so the tax on winnings is the same as the income tax.
The case is different in Europe. Most countries belonging to the European Union set a tax on winnings of 10%. So if you win € 1 million, the tax office will only take you € 100,000. This situation does not apply to Switzerland. This country has its tax laws and unfortunately, we will pay more there.
However, let’s get to the nicer things. For example, if you live in Japan, playing lotteries can be much more profitable for you. There is no lottery tax in this country, and you do not need to include your winnings in your tax returns. So winning a million, a million stays in your pocket.
All winning taxes described above operate as a flat-rate tax. This means that we don’t have to pay it out of our pocket, and it’s taken away from your winnings. However, this is not always the case. If you won a car in the lottery, for example, you must pay for it first. When the car you won is worth 100,000 € and you won it in one of the European countries, to get the car keys you must first pay 10,000 € to the organizer. Then you become the full owners of the car and you can use it.
As you can see, winning the lottery is one thing, but getting the money and the sum you have played is another matter. Remember that the tax is different in every country and the rules for collecting it are too. Therefore, when traveling around the world and playing lotteries, first make sure that you know the rules and that you have chosen the best lottery for you. This will help you estimate costs and increase your chances of winning.
From this place, I would like to wish you only winnings, preferably high and the lowest losses possible. Remember that you don’t always win, but this game is a method of trial and error,