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Tax on Competitions

CorruptedHeartCorruptedHeart
in General
I'm hoping someone here can help me out or at least guide me in the right direction.

I was part of an international mod team that won a modding competition held by Bohemia Interactive: http://makearmanotwar.com/

I helped out on the mod (TFAR) as a part time thing while studying last year, I have since graduated and now work as a programmer but not in the game industry. I am currently still waiting for my portion of the money (in fact still waiting for the company to get in contact with me directly, the main developer of the mod has been in contact), I'm just wondering if there are steps that I should take before I receive the money or only afterwards. I do believe the company requires a certificate of tax residency before they can/will send the money, which can be gotten from SARS.

Is it advised that I speak to an accountant before hand? Or what other steps might I need to take going forward? I'm hoping/expecting to hear back from them within the next couple weeks.

Thanks.

Comments

  • francoisvnfrancoisvn
    edited
    Disclaimer: this is all from my experience, I am not an expert on any of this.

    In terms of tax I believe you'll just have to pay normal personal income tax on that, which basically means you'll include it with your other income for the financial year, and then owe a certain percentage to SARS. That percentage will depend on you level of income, and can range from an effective 18% to 41% with a rebate.

    Here are some resources: In other words, if you are receiving the money now it is part of the 2016 tax year, ending at the end of Feb 2016, and you will have until then to figure things out, but be careful of spending all the money now cause you might have a big problem next year when you owe SARS you don't have.

    EDIT: tax consultation can be pricey (it varies a lot), but an accountant is usually not that expensive to hire. However, if your income is simple in terms of structure, just doing it yourself is very doable.
  • dislekciadislekcia
    So I got some money from a DreamBuildPlay competition once. It took ages. There was some tax documentation they needed, mostly to be able to prove that I lived in a country with a tax treaty with the U.S. So they didn't have to worry about the IRS jumping on them come tax time.

    I filled out a couple of documents and things moved from there. The competition organizers should have all their ducks in a row with this, you shouldn't have to do anything in order to get the money. But when it comes to tax time, you'll need to declare the income from the competition and deal with the that accordingly. I'd say that you should consult a tax accountant to make sure you've got the right rates and stuff when you're closer to tax time here in SA.
  • mikethetikemikethetike
    I won some money ($400) in a IE html 5 game competition a couple of years back. They sent me a form to fill in, which I think I had to put my tax number on. They then sent me a cheque, which something like 40% had come off and was paid for the US tax. After that they sent me a tax certificate that I could use for Sars.

    It was quite a sad story, because the prize i won was an xbox + Kinect but they converted prizes to cash for all international winners. By the time i got past the US tax, deposit fees and commissions for forex, I ended up with R2100 odd, which meant I couldn't even get an Xbox, let alone the Kinect. Still, I'm grateful for the prize anyway.
  • CorruptedHeartCorruptedHeart
    Thanks for all the info. I will take it onboard and see what happens from here.
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