The first question you might be asking yourself is
- do I have to pay taxes on giveaways?
The answer to that question is a bit complicated… let’s take a look!
In the United Kingdom, taxes are NOT required to be paid by the winner on ANY prizes earned in online giveaways! That means, at least in the UK, you can win money without ever having to pay a portion in taxes from those earnings.
Here’s where it gets tricky…
In other countries, you may be required to pay taxes on giveaway earnings you win.
For example, in the United States prizes of a value greater than $600 must be reported to the IRS and will be taxed appropriately.
In Canada there are no taxes on prizes.
The bottom line is to read the specific rules for the country your contest is in to make sure you are taking all necessary legal measures.
What happens if you are hosting a contest in another country but are legally registered as a business in your home country? Again, the answer to that is a bit tricky…
Trying to avoid paying taxes by using loopholes and sketchy methods is NOT advised.
Gambling is historically a tough subject for many countries, sometimes resulting in scams and illegal gambling. That’s why anything involving giving away prizes or money, is now heavily regulated and monitored!
So even though the answer to ‘do I have to pay taxes on giveaways?’ can get confusing, it is necessary to keep everything fair and regulated. Do your research and be smart and your giveaway will be a success!