Lottery winnings and tax policy
Lottery winnings and tax policy in Australia
Current on: 11 August 2025
Short conclusion
In Australia, lottery winnings for individuals are tax-free as they are seen as a result of luck. However, there are situations in which lottery winnings may entail tax obligations, especially with international transfers, cryptocurrency payments or professional activities.
1. ATO position
Random winnings in public and licensed private lotteries are exempt from income tax.
Taxation arises if the winnings are received in the framework of commercial or professional activities (for example, the organization of private lotteries).
For Australian residents, international lottery winnings are subject to declaration if there is no tax in the country of origin, but the source of income must be confirmed.
2. When tax is not charged
Winning national lotteries (Oz Lotto, Powerball Australia, Set for Life, etc.).
Winning charity raffles organised by licensed foundations.
One-time prizes in company shares, provided that this is not part of the winner's entrepreneurial activity.
3. When tax is possible
Professional activity: if draws or lotteries are part of the business.
Foreign lotteries: The ATO counts income in the global resident tax base.
Cryptocurrency prizes: Subject to capital gains tax (CGT) when sold or exchanged.
Investment wins (such as bond lotteries) can be considered investment income.
4. International winnings and transfer control
Transfers from abroad over 10,000 AUD are recorded by AUSTRAC.
Banks can request documents on the origin of funds.
The ATO obtains data on international transactions through CRS agreements.
5. How to arrange correctly
Keep official letters and receipts of winnings.
For international payments - have a confirmation from the lottery organizer and a bank statement.
For cryptocurrency - fix the rate in AUD on the date of receipt.
6. Impact on tax return
Amateur lottery winnings in Australia are not listed in the declaration.
International winnings and income from professional activities are reflected in the Other income or Business income section.
Prizes in kind (cars, real estate) may be taxable upon sale.
Conclusion
For most Australians, lottery winnings are tax-free. But with international transfers, payments in cryptocurrency or professional activities, tax liabilities may arise. The main thing is to have supporting documentation and understand in which cases the ATO will require reporting.
Current on: 11 August 2025
Short conclusion
In Australia, lottery winnings for individuals are tax-free as they are seen as a result of luck. However, there are situations in which lottery winnings may entail tax obligations, especially with international transfers, cryptocurrency payments or professional activities.
1. ATO position
Random winnings in public and licensed private lotteries are exempt from income tax.
Taxation arises if the winnings are received in the framework of commercial or professional activities (for example, the organization of private lotteries).
For Australian residents, international lottery winnings are subject to declaration if there is no tax in the country of origin, but the source of income must be confirmed.
2. When tax is not charged
Winning national lotteries (Oz Lotto, Powerball Australia, Set for Life, etc.).
Winning charity raffles organised by licensed foundations.
One-time prizes in company shares, provided that this is not part of the winner's entrepreneurial activity.
3. When tax is possible
Professional activity: if draws or lotteries are part of the business.
Foreign lotteries: The ATO counts income in the global resident tax base.
Cryptocurrency prizes: Subject to capital gains tax (CGT) when sold or exchanged.
Investment wins (such as bond lotteries) can be considered investment income.
4. International winnings and transfer control
Transfers from abroad over 10,000 AUD are recorded by AUSTRAC.
Banks can request documents on the origin of funds.
The ATO obtains data on international transactions through CRS agreements.
5. How to arrange correctly
Keep official letters and receipts of winnings.
For international payments - have a confirmation from the lottery organizer and a bank statement.
For cryptocurrency - fix the rate in AUD on the date of receipt.
6. Impact on tax return
Amateur lottery winnings in Australia are not listed in the declaration.
International winnings and income from professional activities are reflected in the Other income or Business income section.
Prizes in kind (cars, real estate) may be taxable upon sale.
Conclusion
For most Australians, lottery winnings are tax-free. But with international transfers, payments in cryptocurrency or professional activities, tax liabilities may arise. The main thing is to have supporting documentation and understand in which cases the ATO will require reporting.
