From July 14, “Giveaway” comes under legal regulation, permit required and 18% tax on prize fund

On July 14, the new Law on Games of Chance and Entertainment Games enters into force, for the first time establishing legal rules for the organization of “Giveaway” games. The Ministry of Finance said organizers will be required to obtain a permit, pay a tax of 18 percent of the total value of the prize fund, and make the rules as well as the results of the game public.

Under the new legal definition, the term “giveaway” is defined for the first time as a game of chance, where participation is conditioned by actions such as liking, tagging, sharing or posting content. These are organized with the aim of promoting products or services through the internet, mobile devices or other platforms.

To obtain a permit, the organizer must submit an application to the Ministry of Finance no later than 30 days before the start of the game. The application must also include the relevant documentation, including the game rules, proof of the origin of the prizes, registration documents and certificates confirming payment of public obligations, while legal entities must also provide a certificate showing they are not banned from organizing games of chance.

The law stipulates that the 18 percent tax on the prize fund must be paid within three days of receiving the permit. If this does not happen, the permit is revoked.

The rules of the prize game must also be published before it begins, while the winners must be announced no later than three days after the drawing. The prizes must be delivered within the deadline set out in the rules, but this deadline may not exceed 60 days from the announcement of the results.

The legal provisions also specify what the game rules must obligatorily contain, including details about the organizer, the conditions for participation, the method of selecting winners, the value of the prizes, the complaints procedure, as well as the ban on participation for the organizer’s employees and their close family members.

A “giveaway” game may not last longer than one year.

According to the Ministry of Finance, these new rules bring greater transparency, legal certainty and protection for participants, while at the same time imposing clear obligations on the organizers of these promotional games.