Photograph by Tyler Easton.
The one number that surprises the most people
In the United States, lottery winnings are ordinary taxable income. The moment you claim a prize over $5,000, the payer withholds 24% for federal tax on the spot, but that withholding is not your final bill. Because a jackpot pushes you into the top federal bracket, your actual liability when you file can run as high as 37%, with the difference due at tax time. On top of that, most US states add their own tax, from 0% in states like California, Florida and Texas, up to over 10% in others. A $1 billion jackpot's lump-sum cash value is typically only about half the advertised number before any tax is applied, and that's before the 24–37% federal bite and whatever the state takes.
The tax-free club
Compare that to the United Kingdom, Canada, Australia, Ireland, New Zealand, and Germany. In every one of these, lottery winnings are simply not taxed, full stop. The reasoning is consistent across all of them: a lottery win is treated as a windfall or a rare stroke of luck, not income you earned, so it isn't taxed the way a salary is. Canadian Lotto Max and Lotto 6/49 winners keep every dollar. UK National Lottery and EuroMillions winners (on tickets bought in the UK) keep every pound. Australian Powerball, Oz Lotto and Saturday Lotto winners keep every cent, though if you invest the winnings afterwards, ordinary capital gains and interest tax applies to whatever that money then earns, the same as it would for any other savings.
Where a slice gets taken
Between those two extremes sits a wide middle ground. Spain applies a flat 20% tax, but only above the first €40,000, which is itself tax-free, so a €100,000 El Gordo prize nets around €88,000. Italy applies a similar flat 20%. Switzerland taxes lottery winnings over CHF 1 million at rates up to 35%, set by canton. Portugal, Poland, and several other European countries apply their own flat rates, generally between 10% and 25%. Mexico withholds 7%. Brazil is unusual in that the tax is deducted from the jackpot before the prize is even announced, at a rate commonly cited around 30%, so the number you see advertised is already the after-tax figure, not the amount reduced from it afterward.
The catch that trips up international players
Here's the part most comparisons skip: the tax rule that matters is where you live, not just where the lottery is run. A UK resident who wins EuroMillions on a UK-bought ticket pays no UK tax on it, but the source country's tax-free treatment doesn't automatically follow you home. If you're playing a foreign lottery from a country with its own tax rules on foreign income or gambling winnings, your home country can still tax a prize that the country running the draw would have paid out tax-free to its own residents. Tax and legality are two different checks, and both matter before you assume a "tax-free" jackpot is tax-free for you specifically. For the legal route Australians actually have into international draws, see our International Lottery Results page; for anything about your own specific tax exposure, that's a question for a real tax adviser in your own country, since the rules genuinely vary and change.
My take
The size of the tax bite has nothing to do with luck or effort. It's pure geography, decided years before you ever bought a ticket. Which makes it one of the few genuinely useful things to actually know in advance, rather than something to figure out after the fact with an accountant standing over your shoulder. If you're playing a foreign lottery specifically because of its tax treatment, confirm your own country's rules first. The source country's tax-free status is not a guarantee that applies to you.
If you are an Australian resident, the more useful follow-up question is not whether the prize is taxed, because it is not, but what the prize earns once it is sitting somewhere. That part is taxed like any other income, and our tax and yield calculator puts real numbers on it: what a jackpot pays per year after the marginal brackets, the Medicare levy and the surcharge most winners forget about.
Verdict
As a reason to prefer one country's lottery over another: legitimate, and worth knowing before you play, not after you win. As a substitute for real tax advice on an actual prize: no. Every one of these rates has exceptions, thresholds, and residency wrinkles that a real accountant needs to check against your specific situation before you make any decision.
Tax rates and thresholds change, and residency rules are genuinely complex. This is general information, not tax advice. Confirm your specific position with a qualified accountant before acting on anything here, especially for a real prize.
References
1. LotteryCalc, "Lottery Tax Calculator 2026: Federal & State Taxes on Winnings" (US federal/state withholding, lump-sum vs annuity): lotterycalc.com
2. LotteryPros, "Lottery Tax Rates Around the World Compared" (country-by-country rates and thresholds): lotterypros.com
3. Lottosphoto, "EuroMillions Tax by Country" (Spain's €40,000 threshold and the UK/France/Ireland tax-free treatment): lottosphoto.com
4. GoBigWin, "Taxation guide on European, American and Australian lotteries" (Switzerland, Poland, Mexico and Brazil rates): gobigwin.com