Do You Pay Tax on UAE Lottery Winnings?

Last updated: 17 October 2026

No UAE tax is taken from a UAE Lottery prize. The operator's official FAQ answers the question in one line: "No, prizes are not currently subject to personal tax in the UAE." That is not the whole story for expats, though. The operator's terms make any tax that does apply your responsibility, and the country where you are tax resident may treat the same prize very differently.

Key takeaways

• The UAE Lottery FAQ says prizes "are not currently subject to personal tax in the UAE", and the federal government portal states that the UAE "does not levy income tax on individuals".
• The tax you do pay in the UAE is the 5 per cent VAT already built into the ticket price: about Dh2.38 of every Dh50 Lucky Day entry.
• The operator's terms (clause 10.13) say the winner is liable for "all taxes, duties, levies or similar charges" on a prize, so the lottery will not settle a foreign tax bill for you.
• India taxes lottery winnings at a flat 30 per cent under section 194 of its Income-tax Act, 2025, but its scope rules turn on whether you count as resident in India that year.
• The US taxes its citizens on worldwide income and treats lottery winnings as fully taxable; the UK lists National Lottery wins among income that is not taxed.
• This article explains published rules. It is not tax advice: anyone with a large prize and ties to another country should speak to a qualified adviser.

Is the UAE Lottery tax-free?

Inside the UAE, yes. The question has a dedicated entry in the official FAQ, and the full answer reads: "No, prizes are not currently subject to personal tax in the UAE."

Two words in that sentence matter. "Personal" points to the reason: the UAE has no personal income tax at all. The government portal u.ae puts it plainly: "The UAE does not levy income tax on individuals." The taxes it does levy are VAT, excise tax and corporate tax, none of which is a tax on personal income.

"Currently" is the operator hedging against future law. Nothing published suggests a change, but the FAQ does not promise the position is permanent.

The biggest prize so far shows how this works in practice. After Anilkumar Bolla won Dh100 million in the October 2025 draw, Khaleej Times reported on 14 November 2025 that the lottery had confirmed the prize would be paid as a tax-free lump sum "in a single transaction, without deductions or instalments".

So where does tax appear in the UAE Lottery?

At the till, not at the prize desk. The draw-game ticket prices include VAT. The Lucky Day ticket is Dh50 including 5 per cent VAT, and the Pick 3 and Pick 4 rules list a fixed price of Dh5 per entry with "5% of VAT included".

Ticket — Price — VAT inside the price

• Lucky Day — Dh50 — about Dh2.38
• Pick 3 or Pick 4 — Dh5 — about Dh0.24

The operator's terms add a detail that affects the headline payout figures: "All return to player percentages on our site are calculated exclusive of value added tax" (clause 10.15). Lucky Day's published return to player of 42.62 per cent (plus the Lucky Chance prizes) is measured against the ticket price before VAT, not against the full Dh50.

What do the lottery's own terms say about tax?

The FAQ deals with UAE tax. The terms and conditions (version 20260225) deal with tax in general, and they put the burden on the winner. Clause 10.13 states that you "shall be liable for and pay all taxes, duties, levies or similar charges (including value added tax and any goods and services tax) of any nature whatsoever levied, assessed, charged or collected in relation to the award or payment of any prize".

Read the two documents together and the position is clear: there is no UAE tax to deduct today, and if any tax applies anywhere, settling it is your job. The lottery pays prizes in dirhams (clause 10.2) and pays no interest on them (clause 10.12).

Do expats owe tax at home on a UAE Lottery win?

It depends on your nationality and, above all, on where you are tax resident. Three common cases, each taken from the tax authority's own published rules:

India: 30 per cent, if you are caught by the residence rules

India's Income-tax Act, 2025, in force since 1 April 2026, sets a flat rate for winnings. Section 194, as published on the Income Tax Department's website, applies a 30 per cent rate to winnings from a "lottery", crossword puzzles, races, card games and "gambling or betting of any form or nature", for "any person". The previous law, section 115BB of the Income-tax Act, 1961, set the same "thirty per cent".

Whether a UAE prize falls into Indian income in the first place is a separate question, decided by section 5 of the same Act. A resident is taxed on income from whatever source, including income that "accrues or arises... outside India". The exception is a resident who is "not ordinarily resident": their foreign income counts only if it comes from a business controlled in, or a profession set up in, India. A non-resident is taxed only on income received in India or accruing or arising there. Residence status is assessed for each tax year, so someone who moves home, or splits a year between the two countries, can end up on the other side of that line. The Indian winners in our Dh30 million winner profile and our winners list are the readers this applies to most.

United States: taxed wherever you live

The IRS position is the strictest of the three. Its guidance for Americans abroad says US citizens and resident aliens are "subject to tax on worldwide income from all sources". Its gambling guidance (Topic 419) says gambling income "includes but isn't limited to winnings from lotteries", and that "gambling winnings are fully taxable and you must report the income on your tax return".

There is a trap for UAE-based Americans used to paying nothing on their salaries. The foreign earned income exclusion covers "pay for personal services performed"; the IRS's own table classes gambling winnings as unearned income. A US citizen in Dubai who wins Dh5 million should expect it to be reportable in the US, with no UAE tax paid that could be credited against the bill.

United Kingdom: lottery wins are not taxed

The UK sits at the other end. Gov.uk lists "premium bond or National Lottery wins" among the things you do not pay Income Tax on, and section 51 of the Taxation of Chargeable Gains Act 1992 declares that winnings from "lotteries or games with prizes are not chargeable gains". Neither source names foreign lotteries specifically, so a UK-resident winner of a large UAE prize should still confirm the position with HMRC or an adviser.

Everyone else

Most expat nationalities fall between these cases. The safe reading of the operator's terms is that nobody at the UAE Lottery will check your home-country position for you.

What should a big winner check before moving money home?

Answer four questions before a large prize leaves the UAE:

1. Where am I tax resident this year? For India, the US and many other countries, this decides everything, and it can change mid-year if you relocate.
2. Does my country tax foreign gambling or lottery income? Use the tax authority's own guidance; many online explainers still cite India's pre-2026 section numbers.
3. Will the transfer itself raise questions? Large inbound remittances can trigger bank or tax-office queries even where no tax is due. Keep the lottery's winner paperwork.
4. Is a group sharing the prize? The lottery pays the whole prize to the named ticket holder and takes no responsibility for syndicate splits (clauses 2.6 and 11 of the terms). Each member's tax position depends on their own residence, not the ticket holder's.

FAQ

Is UAE Lottery prize money taxed in the UAE? No. The official FAQ says prizes "are not currently subject to personal tax in the UAE", and the UAE does not levy income tax on individuals.

Does the UAE Lottery deduct anything from a jackpot? No UAE tax is deducted. The lottery confirmed the Dh100 million prize won in October 2025 would be paid as a tax-free lump sum in a single transaction, according to Khaleej Times. The FAQ does list a Dh5 bank charge per withdrawal from an online account.

Do Indian expats pay tax on UAE Lottery winnings? India taxes lottery winnings at 30 per cent under section 194 of the Income-tax Act, 2025, but a non-resident is generally taxed only on income received or arising in India. Your residence status for the year is the deciding factor.

Do Americans in Dubai pay tax on UAE Lottery winnings? US citizens are taxed on worldwide income, and the IRS treats lottery winnings as fully taxable and reportable, wherever they live.

Is the VAT on tickets refundable if I win? No mechanism for that is published. The 5 per cent VAT is part of the ticket price, and the operator's payout percentages are calculated excluding it.

Is this article tax advice? No. It summarises official published rules as of October 2026. Speak to a qualified tax adviser in your home country before acting on a large win.

Further reading

• UAE Lottery rules explained
• UAE Lottery winners: every grand prize winner so far
• Sunil Kumar Sadasivan and the second Dh30 million jackpot
• UAE Lottery vs Big Ticket vs Dubai Duty Free
• Responsible gaming rules in the UAE

Sources

• The UAE Lottery, "FAQs" (accessed 17 October 2026): https://www.theuaelottery.ae/faq
• The UAE Lottery, "Terms and Conditions", version 20260225 (accessed 17 October 2026): https://www.theuaelottery.ae/Terms-and-Conditions
• The UAE Lottery, "Pick 3" game rules (accessed 17 October 2026): https://www.theuaelottery.ae/lottery/pick3
• UAE Government portal, "Taxation" (accessed 17 October 2026): https://u.ae/en/information-and-services/finance-and-investment/taxation
• Khaleej Times, "UAE Lottery's Dh100-million win to be paid in a single transaction" (14 November 2025): https://www.khaleejtimes.com/uae/lotterys-dh100-million-win-paid-single-transaction
• Income Tax Department (India), "Section 194: Tax on certain incomes", Income-tax Act, 2025 (accessed 17 October 2026): https://www.incometaxindia.gov.in/w/section-194-76
• Income Tax Department (India), "Section 5: Scope of total income", Income-tax Act, 2025 (accessed 17 October 2026): https://www.incometaxindia.gov.in/w/section-5-256
• Central Board of Direct Taxes (India), "Income-tax Act, 2025 comes into force from 1st April, 2026" (press release, 1 April 2026): https://www.incometaxindia.gov.in/documents/d/guest/press-release-income-tax-act-2025-comes-into-force-from-01-april-2026-pdf
• Income Tax Department (India), "Section 115BB", Income-tax Act, 1961 (accessed 17 October 2026): https://www.incometaxindia.gov.in/w/section-115bb-38
• IRS, "U.S. citizens and resident aliens abroad" (reviewed 28 September 2026): https://www.irs.gov/individuals/international-taxpayers/us-citizens-and-resident-aliens-abroad
• IRS, "Topic no. 419, Gambling income and losses" (reviewed 24 September 2026): https://www.irs.gov/taxtopics/tc419
• IRS, "Foreign earned income exclusion: what is foreign earned income?" (reviewed 14 March 2026): https://www.irs.gov/individuals/international-taxpayers/foreign-earned-income-exclusion-what-is-foreign-earned-income
• GOV.UK, "Income Tax" (accessed 17 October 2026): https://www.gov.uk/income-tax
• legislation.gov.uk, "Taxation of Chargeable Gains Act 1992, section 51": https://www.legislation.gov.uk/ukpga/1992/12/section/51