Have you ever thought of winning the lottery?
It rarely haapen. but, in case of your lottery winning, I'm going to explain taxes about it.
The NTS will charge you income tax and local tax on the amount your lottery winnings.
1.How are lottery winnings taxed?
In Korea tax law, there are three types of income.
1)income subject to global taxation
Typically, income tax is imposed using a progressive tax rate on the sum of all income attributable to an individual.
2)income subject to schedular taxation
Schedular taxation applies to retirement income and capital gains. such types of income are not aggregated with global income and taxed seperately.
3)income subject to to seperate taxation.
This types of income are not aggregated with other income and are withheld at the time of payment by the income payer.
Seperate taxation is applies to lottery winnings icnomes. So the lottery company is going to withheld taxes from your lottery prize you will get the net amounts to your bank account.
2.Tax rate of lottery winings
Tax rate for lottery winnings are 20% or 30%.
Basically the tax rate is 20%. but when the amount of income exceeds 300,000,000 KRW the tax rate is 30% of such excess. and as I explaind above, the lottery company will withheld your taxes from your prize.
For example,
when your lottery prize are 1,000,000,000 KRW, lottery company would withheld *270,000,000 from your lottery prize and you will get 730,000000 KRW to your bank account.
*300,000,000 x 20% = 60,000,000
*700,000,000 x 30% = 210,000,000
*60,000,000 + 210,000,000 = 270,000,000
Thank you for read my article! I hope it helps.
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And if you need help for your tax filing or accountung or looking for CPA in Korea, don't hesitate to contace us
you can contact us easily through direct message
G-tax / Certified Tax Accountant / Steven Yang
+82 10 9599 7152
steven@g-tax.kr
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