South Africa’s Gambling Tax Laws Under Scrutiny

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South Africa’s Gambling Tax Laws Under Scrutiny

Lottery tickets, sports betting and casino games are big business in South Africa. All three forms of gambling are legal on land-based platforms, while only the national lottery is officially permitted online.

Beside that, the country enjoys the same legal loophole as many others do when it comes to online gambling; sites based within the country are illegal but offshore operators are not.

Popular gambling sites that operates within South Africa with a licence is BEtway South Africa, Yebo Casino and Sportingbet – which are some of the sites we highly recommend, so try to stick with these local operators if you are planning to bet online or play online casino. Another popular betting site is Hollywoodbets, and they also are a licensed operator.

Many players and bettors in South Africa have won large amounts gambling on land-based, desktop and mobile platforms, and the popularity of gambling is set to continue in 2020. Anyone interested in trying their luck should learn about the nation’s taxation laws on winnings before they start. The legalities are outlines below.

Taxes on Casino Wins

There are two possible situations for casino payouts in South Africa; individuals might be gambling for pleasure or recreation only, or they might be participating in a scheme or gambling with the sole aim of generating regular profits.

In the first case, when someone is playing for fun and considers any win a pleasant surprise but not the only point of gambling, returns are treated as capital and cannot be taxed. However, they must still be declared to the South Africa Revenue Service.

No matter how much or how little you win, you need to state the amount clearly on your tax return and mention that it should be considered non-taxable gains for the relevant fiscal year. You should also explicitly say that you aren’t bound to pay any levies on it.

In the second instance, when gambling activities are carried out as regular income earners, your winnings can no longer be considered capital. The 5% of betting returns that fall into this category are bound by South African Revenue Service income tax laws. Professional gamblers will need to pay these tariffs on their wins, which represent their livelihood.

Taxes on Lottery Wins

Lottery winnings are regarded in the same way as recreational betting payouts, meaning that the Revenue Service legally considers them to be capital and they cannot be taxed.

You are not required to pay anything on what you win, but you do need to declare the monies on your return. This rule applies to all amounts, no matter how big or small they are.

Taxes on Workplace-Related Wins

If your winnings are directly related to your place of employment, they might need to be taxed depending on whether or not they are considered gross income. South Africa’s taxation legislation clearly states that any funds received from employers for services rendered, even if the tasks are voluntary, must be recorded under gross income and pay the levies that come along with that.

In other words, all work-related remuneration must be declared as gross income, whether employees get paid out annual bonuses or prizes for “best office manager”.

However, if the award has nothing to do with services rendered but is still connected to your employer, such as winning an office-based lottery, the money is considered capital and no taxes are applied.

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