Tax on Lucky Draw, Raffle and Promotion Prizes in Asia

Which prizes count as taxable income

The first thing to sort out is what kind of prize you have won. These are all treated differently depending on where you are:

• A raffle at a school fair
• A shopping mall lucky draw
• A trade promotion where you enter a code from a receipt
• A national lottery ticket

In South Korea, the tax law is broad. Prizes, prize tickets and other lottery winnings are classified as other income, and that covers the goods you receive when you win a lottery, a prize ticket or any other kind of drawing ticket⁶. The same law also treats prize money or dividend money from slot machines, video games and similar devices as other income⁶. So a shopping lucky draw prize and a slot machine payout both land in the same bucket.

Vietnam draws a line between betting and casino play. Winnings from betting are taxable, but casino winnings are exempt⁷. That distinction matters if you are trying to work out whether a promotion prize tied to a betting product is caught. The general rule for prize winnings is that the taxable income is the part of the prize value above VND 10,000,000 per win, regardless of how many times you receive prize money⁸. From July 1, 2026, that threshold rises to VND 20,000,000 per win⁷.

China treats lottery winnings as incidental income, taxed on the amount of each income⁹. The same principle applies to prize draws and promotions: the prize is income, and the amount of each win is the taxable base¹⁰.

In Hong Kong, the picture is different for ordinary draws. No betting duty is charged on winners of ordinary lucky draw activities, and no betting duty document is issued to winners⁵. That does not mean every prize is tax-free, but a straightforward shopping center draw is not something the tax office will chase you for.

Japan: how winnings from public sports and pachinko are taxed

Japan has a specific rule for public sports. Refunds from public sports are not subject to income tax¹¹. That covers the state-run betting products where the payout is treated as a refund rather than a prize.

For public racing, which includes horse racing, keirin, auto racing and boat racing, the treatment is different. If you receive payouts from public racing, you may need to file a final tax return¹. The payout is treated as temporary income, and the calculation starts with the amount you received¹.

The key point for anyone entering a promotion or lucky draw in Japan is that the tax treatment depends on the source. A payout from a public racing bet is temporary income. A prize from a shop promotion is a different question, and the general rules on occasional income apply.

Pachinko sits in its own space. The winnings themselves are not paid out as cash in the usual way, and the tax treatment follows the temporary income rules when a payout is received. If you are a visitor, the practical point is that any significant payout from a public racing product may need to be declared, while a small prize from a shopping draw is unlikely to cross the threshold.

Special deduction: JPY 500,000 per year

Japan gives a special deduction for temporary income. The maximum is JPY 500,000¹. This applies to temporary income from public racing payouts¹.

The way it works is simple. You take the payout amount, subtract the cost of the winning tickets, and then subtract the special deduction of up to JPY 500,000¹². What is left is the taxable temporary income.

This deduction is per year, not per bet. So if you have several winning payouts across the year, they are added together and the single JPY 500,000 deduction is applied once. That is why a series of small wins can stay under the threshold while one large win pushes you over.

For a visitor or a new resident, the practical effect is that the first JPY 500,000 of temporary income is effectively tax-free. If your total temporary income for the year is below that, you generally do not need to file a final tax return¹.

Calculation formula: half of the excess is taxed

Once you have worked out the temporary income after the special deduction, only half of it is taxed. The formula is: payout minus the cost of winning tickets, minus the special deduction, and then half of the remaining amount is the taxable figure¹².

This is why the effective tax rate on a large public racing win is lower than the headline rate. The deduction and the halving rule both reduce the amount that is actually taxed.

For a JPY 100 million lottery prize, the income tax at progressive rates comes to JPY 16.9 million, and resident tax at 10 percent comes to JPY 4.93 million¹¹. Those taxes take about 21.8 percent of the payout, so the winner keeps JPY 78.17 million, or 78.2 percent of the prize¹¹. The effective payout rate for public sports after tax on a JPY 100 million win is 58.5 percent¹¹.

Those figures are for the largest prizes. For an ordinary punter, the deduction and the halving rule mean that a modest win often produces no tax at all.

Worked example: JPY 600,000 in payouts, JPY 50,000 in winning tickets

Take a year in which you receive JPY 600,000 in payouts from public racing, and the tickets that won cost you JPY 50,000. The calculation is: JPY 600,000 minus JPY 50,000, which gives JPY 550,000. Then subtract the special deduction of up to JPY 500,000, leaving JPY 50,000. Half of that is JPY 25,000, which is the taxable temporary income¹².

If the same year also included losing tickets, those do not change the calculation. The purchase cost of losing tickets cannot be deducted¹. So if you spent another JPY 100,000 on tickets that did not win, that money is gone for tax purposes.

This is the single most important practical point for anyone who bets regularly. Only the winning tickets count as a cost. A year of small losses does not reduce the tax on the one big win.

For a shop promotion or a lucky draw prize in Japan, the same temporary income framework can apply if the prize is large enough. The deduction and the halving rule are the same, but the cost side is usually zero because you did not buy a ticket to enter.

When no tax return is required

If your temporary income for the year is below the special deduction, you generally do not need to file a final tax return¹. That is the simplest rule to remember.

For public sports refunds, there is no income tax at all¹¹. So if your only winnings are from public sports, you are not in the temporary income system.

For a small prize from a shopping draw or a trade promotion, the amount is often below the threshold where filing becomes necessary. The practical answer is that if the prize is modest and it is your only temporary income for the year, you are unlikely to need to do anything.

If you are a visitor, the position is usually simpler still. You are not filing a Japanese tax return for a prize you won during a short stay unless the amount is large and you have other Japanese income.

Deductible costs: winning tickets only

The only cost you can deduct against public racing payouts is the purchase cost of the winning tickets¹². The cost of losing tickets cannot be deducted¹.

This is a narrow rule. It means you cannot net off your losses against your wins. If you bought ten tickets and one won, only the cost of that one winning ticket reduces your taxable income.

The same principle appears in the research on occasional income: only the amount used to purchase the winning betting ticket is treated as a directly necessary expense¹³. That confirms the narrow reading.

For a promotion or lucky draw, there is usually no ticket cost to deduct because entry is free or the cost is the price of goods you would have bought anyway. So the taxable amount is closer to the full prize value.

Thailand charity lottery: 1 percent withholding at source

Thailand treats charity lottery prizes differently from government lottery prizes. For the charity lottery, income tax is withheld at source at a rate of 1 percent of the prize money³. The same 1 percent withholding applies to charity lottery prize claims¹⁴.

Government lottery prizes work on a different mechanism. The prize claimant pays stamp duty at THB 1 for every THB 200 of prize money, or part of THB 200³. That is collected from the prize recipient¹⁵.

So if you win a government lottery prize, you are not paying income tax at source in the same way. You are paying stamp duty on the prize. For a charity lottery prize, the 1 percent withholding is the income tax element.

The charity lottery results are checked using the government lottery results of the same draw³. Government lottery draws are held on the 1st and 16th of each month¹⁵. Winners of the government lottery have 2 years from the draw date to claim, after which the money goes to state revenue¹⁴. Charity lottery winners have 10 years from the draw date³.

Government lottery tickets are THB 80 each in the single-ticket format used since the draw of September 1, 2017¹⁵. Before that, tickets were sold in pairs at THB 80, and earlier still at THB 40 per half¹⁵. A set contains 1,000,000 tickets priced at THB 80 each¹⁴. Each set has 14,168 prizes totaling THB 48,000,000¹⁴. The three-digit last prize is THB 4,000 per set if all tickets are sold, drawn twice, and the two-digit last prize is THB 10,000 per set, drawn once¹⁴.

Prize claims at the government lottery office are handled at a daily capacity of 65,000 tickets, split into 45,000 in the morning from 07:30 to 12:00 and 20,000 in the afternoon from 12:01 to 15:00, Monday to Friday, via online queue booking¹⁵.