Taxation of lotteries, competitions, games

Date of issue
- 6/13/2017

The guidance is being updated.

This article is an unofficial translation of instruction no 939/420/2011, dated 27 December 2011, Arpajaisvero; Lotteriskatt”.


Lottery tax (in Finnish: Arpajaisvero; in Swedish: Lotteriskatt) concerns lotteries, competitions, games and similar events organized in Finland. It is payable to the Finnish state, and the taxable person is the operator or organizer. If several bodies or persons share the work of operating or organizing such events, all are jointly and severally liable for payment of the tax.

Under § 85 of the Income Tax Act, income arising from winnings in a lottery may be exempt from income tax under the following conditions:

Exemption may be granted if income arises from winnings in a lottery in an EEA country, operated according to the rules of the national legislation of that country, or from a Finnish lottery conforming to the provisions of § 2 of the Act on Tax on Lottery Prizes. However, any prize is taxable if it is of the nature of a payment paid in exchange for goods or services, or if it is of the nature of wages, under the rules governing withholding tax on wages paid out to employees and workers (Prepayment Act).

Events governed by the Act on Tax on Lottery Prizes  

The concept of ’lottery’ (Finnish: arpajaiset; Swedish: lotteri) covers cash competitions or sweepstakes, non-money lotteries where consumer goods are given out as prizes, guessing games, bingo games, football pools, other betting and horse races, along with the operation of slot machines that may give cash or consumer goods as prizes, and the operation of gambling games in a casino establishment.

The Act also governs temporary, one-time public competitions or sweepstakes, guessing games, gambling, betting, and other comparable events where random results will determine who is to win cash or non-cash benefits.

Events have their own particular entrance processes: players cannot participate unless they fill out a questionnaire, answer a few questions, or walk through a commercial exhibition area. However, the method of entrance has no bearing on the application of the Act.

The Act is not applicable unless the outcome of the event is determined on a random basis.

The Act is not applicable unless the event is effectively open to the public. This means that the operator should impose no restrictions as to who can participate or how many participants or players there may be. For a public event, the total number of participants should be relatively large; several hundred participants is usually the minimum requirement.

Prize may be taxable income for the winner

If the event is not operated in EEA countries, or if Act does not apply to the prize, the winner must pay tax.

Income tax will also be levied on prizes won in quiz games, ice-fishing competitions and other comparable events where there is a skillful work effort, performance of an exploit, or a placing (such as first place, second place, or third place in a competition) that determines who will win money in cash or as non-cash benefits. In these cases, the winner-beneficiary will have the obligation to include the income in his tax return.

Correspondingly, the operator is required to give information and file an annual information return (form 7801e, Annual information return summary and itemization), using code H4 as Type of Payment.

Prize is taxable if:

  • it is of a nature of wages, paid for work or other performance  
  • the payer is the winner’s employer  
  • it is not based on chance, i.e. unsystematic or a random outcome
  • it does not arise from an event open to the public  
  • it is based on a competition where best results are rewarded  
  • it is won in a lottery operated outside the European Economic Area.

If an employer has organized a drawing to randomly give out a trip abroad as a prize to one of the workers, it will be taxable as wages in the hands of the winner.  Also any prizes arising from sales competitions, bringing of customers competitions and similar competitions organized by the employer are taxed as wages. Art competition awards and prizes won by schoolchildren in various school events or competitions are usually exempt.

Amounts and rates of lottery tax


  • 12% on the operator’s gross profit from lotteries organized by sole right
  • 1.5% on the total sales of tickets from lotteries of goods and guessing games, organized by non-profit organizations, as defined by the provisions of the laws governing gaming, gambling and lotteries.  
  • 1.5% on the gross profit from keeping automated machines, giving consumer goods as prizes, available to the public.
  • 5% on the total value of winnings and prizes given out in a bingo game, not counting the prizes that entitle the player to a free repeat game.  
  • 30% on the total value of winnings and prizes given out in any other lottery/competition.  

A lottery in which the prizes are goods (a raffle)

A raffle means a lottery based on drawings of chance or other similar manner at random where it is possible to win any of the prizes. The prizes can be different kind of goods or gift cards and vouchers which can be exchanged for goods or services.

These types of events subject to fees may only be organized by non-profit organizations under the rules of the legislation governing gaming, gambling and lotteries. Under § 27 of the Act governing gaming, a school class, a club, or a group of co-workers can organize small events where goods can be given out as prizes. Lotteries/raffles operated or organized by any other body will fall into the category of other lottery/competition, even when the prize is goods, and thus taxed at the 30-percent lottery tax rate.

However, if total sales of tickets stays below EUR 3 333.33, no lottery tax is payable.

Other events

Typical events equated with lotteries and competitions are advertising-related competitions or competitions and drawings for readers of newspapers and magazines. Similar events are also lotteries organized by shops and restaurants among those that have filled out different kind of coupons or questionnaires. In this case, the lottery tax is 30% of the total value of the prizes distributed to the participants. However, if the total value of the prizes is less than EUR 166.66 per calendar month, no lottery tax need be paid.

Taxpayers should compute their payable amounts of lottery tax with the accuracy of one cent, not round the amounts up or down. If the resulting sum does not reach the threshold EUR 50.00 per calendar month, the lottery tax need not to be paid.

Calculating ‘gross profit’

The gross profit serving as tax base is the difference between participants’ cash stakes and the total of winnings paid out. Nevertheless, in the case of non-money competitions or guessing games where goods are given as prizes, total sales of tickets i.e. total incoming amount of money is the tax base. Similarly, in the case of automated machines giving consumer goods as prizes, the tax base is the total incoming payments from machine users.

The value of winnings  

The value of the winning is the amount of the prize/winning or the purchase price of the goods or commodity that was paid by the lottery operator/organizer. This amount is the net price actually paid, after subtraction of any usual price discounts implemented. This value will thus include VAT, independent of whether the operator is entitled to deduct input VAT from his purchases (ruling by the Administrative Supreme Court no 2007:32). If the operator received the goods for free, or if the purchase price cannot be determined for other reasons, fair market value of the prize will be the basis of the valuation rule for the prize. Fair market value means the probable selling price, if the operator had sold the goods instead of giving them out as prizes. So, fair market value is applicable in cases where a wholesale company or importer has sold the goods to the operator for a low price, or given them to the operator for free, seeking to improve product awareness.

Payment and reporting of lottery tax

Lottery tax falls due on the 12th day of the second month following the event. This is the due date both for payment and for (electronic) submittal of Periodic tax return.

Periodic tax returns can be submitted electronically at (the interface only works in Finnish and Swedish).  If submitted electronically, Periodic tax returns are due on the 12th of the calendar month, however, if not submitted electronically, Periodic tax returns should arrive at the tax office on the 7th of the calendar month. Please be advised that Periodic tax returns cannot be sent by fax.

If the due date falls on a Saturday, Sunday or legal holiday, the last date of submittal will be the following weekday, which is not a Saturday, Sunday or legal holiday.

Calendar month regarded as the taxable period is:

  1. Revenue month under accounting rules, i.e. the month when accounting rules require that the income should be entered in accounting records;
  2. The closing month of a non-money competition/event;
  3. The calendar month during which a bingo game took place;
  4. The calendar month when winnings, as referred to in § 4.4 of the Act, have been ready for collection by the winning participant of the competition/event.

For precise information on deadlines and calendar dates, go to

The Tax Account calendar gives details on:

  • Last filing dates of Periodic tax returns
  • Due dates for payment of taxes.

The following information should be stated in the Periodic tax return:

  • Business ID (Y-tunnus) of the lottery operator/organize
  • the code for lottery tax is 10
  • the reporting period for lottery tax is always one calendar month
  • reporting period and year (the month is marked with two digits and the year with four digits)
    the amount to pay

The Tax Administration may request the taxpayer to submit more specific information.

For more information on official permits to organize lotteries, go to