Around the world, lotteries have been launched to raise funds for government programs and community initiatives. Funding is derived not only from ticket sales, but also from the taxes that winners must pay on their prizes. In Europe, tax rates differ from country to country, with each government taking a different share of the premium.
In the United States, all lottery winnings are taxed at a rate of 25%. This money is then used by the federal government to fund various initiatives. Across the pond, the same applies, and taxes range from 10% to 20%, depending on the country.
In Greece, a new law was passed that will tax all lottery winners with 10% of their prizes. The legislation met with great resistance, as taxes must be paid on absolutely all earnings, even those worth 1 euro. In other countries, there is a minimum of € 500 to € 3,500 that players must win for their winnings to be taxed. In Portugal, players must spend 20% of their winnings in taxes, while Romania requires a lottery tax of 25%. In Poland, the lottery tax is 10% and in Italy, 6%.
If you are an avid lottery player, it seems like the best places to live would be France and the UK. All winnings, no matter how large, are paid out as lump sums and are not taxable. It may sound too good to be true, but it is actually so. More than 8,500 players have become millionaires thanks to the French lottery, and none of them had to spend part of their money to pay taxes. In the UK, the lottery is known for awarding millions of pounds in funding to various community organizations, but these donations are derived from ticket sales rather than lottery taxes. Other tax-free lottery locations are Austria, Germany, and Ireland.
For tax-free winnings, you can also play the EuroMillions lottery draw. Renowned for paying out nearly € 1 billion in cash prizes over the years, this generous lottery has turned thousands of Europeans into millionaires. The winners of this jackpot receive their prizes as lump sums and do not have to pay taxes.
However there are some exceptions. In January 2013, the Spanish government introduced a 20% tax on all EuroMillions prizes. Portugal has had a similar rule for quite some time, requiring all winners to pay 20%. In Switzerland, EuroMillions winners have to pay taxes, but it varies depending on the state the winner lives in.