The tax on lottery winnings

Winning the lottery is one of the most exciting experiences there is. After all, in one day the whole lifestyle changes and the dreams that until yesterday were almost impossible, become sustainable and amazingly available. Whether it is the purchase of a vacation home or a new luxury car, whether it is huge investments in the stock market or investment in real estate - all of these become possible plans overnight. But the final winning amount does not reach your pocket in its entirety. This is a detail that many forget. Taxes of any kind must be paid in Israel, and the same applies to lottery winnings. Every lottery winning is subject to tax and when talking about high amounts, the tax amounts are also higher. Exemption for winnings is for an amount up to NIS 49,920, so if you won an amount higher than that you are indeed Lucky, but also have to pay tax.

Tax rates vary

The law actually sets different tax rates for different amounts of winnings so that the tax you will pay is not fixed by law but is defined by the amount of money you won. The taxable amount is the difference between the maximum amount for which an exemption is given and the winning amount. This gap is multiplied by 2 and no less than 30% is offset from that. The tax is paid after winning and then you can do whatever you want with the profit. The tax must be calculated in an orderly manner and the payment must be transferred in an orderly manner as well. Paying the tax on the winnings is necessary, but in most cases, even after paying the tax, a very large amount remains, which can be invested in the stock market or bonds and get the amount back in a short time. There is no doubt that winning is one of the most exciting moments, but the tax is part of it, applicable to all winners. The exemption, however, reaches an amount of up to NIS 100,000 when it applies to a partial amount of the winnings. The relative part is not calculated when paying the tax and it is transferred to the winner. The taxable portion is calculated according to the above explanation and paid to the income tax. Lottery taxation is not a new law in Israel and in fact there is an obligation to pay tax on every winning and not just the lottery. The significant advantage of the lottery is the possibility of earning huge sums that make the tax payment a minor and almost imperceptible detail. The tax payment must be made close to the stage of receiving the money and make sure that the winner has no more debts towards the state. There are countries where lotteries winnings are not taxed and do not require payment, but in most cases these are winnings of small amounts of money. To find out more details about the payment, it is important to be interested in the lottery website and you can get more details from the company's representatives.