South Korea's Ministry of Economy and Finance said on January 3, 2023 that the tax-free threshold for lottery winnings rose from KRW 50,000 to KRW 2,000,000 under an amendment to the Income Tax Act, effective January 1, 20231. The ministry announced the change two days after it took effect1.
The amendment moves Lotto third prize winners, who typically receive about KRW 1 million, out of the taxable category, along with Pension Lottery third and fourth prize winners1. Lotto first prize winners, who usually receive more than KRW 1 billion, and second prize winners, who receive tens of millions of won, remain taxable1.
| Prize | Typical amount | Status after January 1, 2023 |
|---|---|---|
| Lotto 3rd prize | About KRW 1 million | Tax-free1 |
| Lotto 2nd prize | Tens of millions of won | Still taxable1 |
| Lotto 1st prize | More than KRW 1 billion | Still taxable1 |
| Pension Lottery 3rd and 4th prize | Not stated | Tax-free1 |
Winners of amounts up to KRW 2 million can collect at a bank once their identity is confirmed, without the resident registration number and payment statement procedures required for taxable prizes1.
The ministry said:
"기획재정부는 소득세법 개정에 따라 올해부터 복권 당첨금 비과세 기준선이 이처럼 상향조정된다고 3일 밝혔다."
The new threshold applies to prizes claimed on or after January 1, 2023, even if the winning ticket was bought in 20221.
What it means for players
For anyone holding a Korean lottery ticket, the dividing line is now KRW 2,000,000 rather than KRW 50,000. Prizes at or below that level carry no tax and no requirement to hand over a resident registration number or complete a payment statement1. Collection is limited to identity verification at a bank1.
The change affects the two state-run games named in the announcement, Lotto and Pension Lottery1. It does not change the treatment of larger prizes: Lotto first and second prizes remain taxable1. The announcement did not state the tax rate applied to those larger prizes, and no figures for other gambling products, casino payouts or foreign residents were given1. Whether the threshold applies differently to non-residents has not been reported.
The timing rule matters for anyone who won late in 2022 and has not yet claimed. A prize claimed on or after January 1, 2023 falls under the new threshold regardless of the draw date1. The government's stated expectation is that fewer prizes will go unclaimed as a result1.
More detail on how Korea taxes prizes sits in the guide to tax on gambling winnings in South Korea, and the wider regional picture is covered in tax-free thresholds for lottery and gambling prizes in Asia and tax on lottery winnings in Asia. For background on what is legal to play in the country, see Can I Gamble in South Korea?.
What happens next
The amendment is already in force, so there is no further legislative step described in the announcement1. No review date, sunset clause or further threshold change was reported1.
Sources1 sources
- 복권당첨금 200만원까지 비과세…로또 3등 세금 안낸다 | 연합뉴스, yna.co.kr
