INCOME TAX ON PRIZES FROM LOTTERIES

I. Definition

Income on prizes from lotteries is income tax levied on income in form of money, goods or fringe benefits derived from lotteries.

II. Withholding Agent

The withholders of prizes from lotteries are the following organizers namely, individuals, legal companies, committees, organizations or entrepreneurs.

III. Tax Rate

The tax rate on the said prizes is 20% of the followings:

1. The gross amount of such prizes paid in form of money;

2. Market value of such prizes provided in form of fringe benefits.

IV. Timing of Tax Due, Deposit and Reporting

1. Timing of Tax Due

Income tax on prizes from lotteries is due at the end of the month in which either the payment made or prizes delivered. Before either the said payment made or prizes delivered to beneficial owners, the above prizes are levied tax by the said organizers as the withholding agent.

If the amount of each prize is Rp 5 Million or more, attached 3 (three) copies of the withholding tax receipts are as follows:

a. the first copy is for the recipient;

b. the second copy is for the district tax office;

c. the third copy is for the organizer of lottery.

However, if the amount of each prize is less than Rp 5 Million, a nominative list consisting of the name of the winner and the amount of prizes shall be made and attached 2 (two) copies as follows:

a. the first copy is for the district office;

b. the second copy is for the organizer of lottery.

2. Deposit

a. The deposit of the above said withholding tax by the said organizer to the designated bank or post and giro office shall be made not later than 10 th day of the ensuing month.

b. The deposit shall be made by using the tax payment slip and the withholder shall write his/her tax identity number on the said payment slip.

3. Reporting

The withholder shall submit the monthly income tax return to the district tax office where the said withholder is registered not later than 20 th day of the ensuing month. Attached 3 (three) forms are as follows:

a. the third copy of the tax payment slip;

b. the second copy of the withholding tax receipts (for each prize which the amount is Rp 5 Million or more paid or delivered);

c. the list of the withholding tax.

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