Keysight Scopmonth, Taxes when winning. Marketing-Bullshit?

[StuUK]

It could exceed  50% tax! So Keysights Scopemonth may ruin my life.

Sebastian

Being a little over dramatic, don't you think? It's especially insulting to come on to a forum where many of us would love to win the prize you were just awarded, just to complain about it.

So, the scope is worth approximately 20,000 USD, give or take. We'll use your number of 50% tax. So you'd pay ~10,000 in tax for the scope. Leave it in the box, put it in Buy/Sell/Wanted or on an auction site as NIB, and price it at 15,000 USD. Someone will buy it. Take the 15,000 from the sale, pay the 10,000 in tax, then use the 5,000 to buy a more affordable scope.

How does that ruin your life? 

Indeed, some people are never happy... Try reading all the rules before entering and set your expectations accordingly.

[signals]

For Canada and South Africa they have a “mathematical skill-testing question”. I wonder if that is legal in the US. So much about ethnic discrimination at Keysight.

Sebastian

It's the only way it's legal in Canada: https://en.wikipedia.org/wiki/Skill_testing_question

I think you are misplacing your anger. Maybe you should be upset with your government for the taxes they want to collect, rather than be upset with Keysight for giving you a free scope?

[Halfdead]

If you don't want it, I'll take it.

[Cubdriver]

If it's going to ruin your life, turn down the prize. They're not going to FORCE you to accept it.   

-Pat

[Bud]

A couple years ago I won an item through another Agilent contest. Similar to this one, that contest was open to Canada, USA, and many other countries. I did not pay anything to the US government or even to Canada. Agilent named itself the importer and they paid the import taxes! (HST in Ontario, Canada

That makes Canada an ideal place for sweepstakers to live in
 

What was the item value? I recall there is a $600 threshold IRS applies to wins.

[GlowingGhoul]

Hello,

the main reason I opened the topic was to warn others that are not aware that winning the contest could ruin their life. Keysight offers a 70,000$ Scope to win(video contest). If the one signs the paper, which I have not up to now, he or she has to pay 30-50% tax, about 20,000 maybe even 40,000$. The way Keysight handles it is, ignoring the problem, contractually making the winner responsible, and the winner has to care about the tax-laws of two or three countries. I do not think what they do is fair, even it is correct to US-law. Just think about a young student, … .

If you win the price in the county where you are located, it does not cause that much trouble and the regulations are much easier to handle. I invited Robert Lashlee (Keysight Business Development Manager at Keysight) to be my “Facebook Friend”, no response.

I think what they do, they ship it from Malaysia to Germany and do only pay the costums and taxes for the “production cost”, the Distributor will charge the VAT for the retail-price. They do not want their production cost to be public. Usually people that win a price in the US have to pay a tax (e.g. at LasVegas), there is no exception for foreigners. But let’s see what they tell me on Monday.

What is interesting, Keysight did not join this EEVBLOG-topic officially, but they run an account. Maybe it was a part of their strategy to scare away the winners by signing a contract. For Canada and South Africa they have a “mathematical skill-testing question”. I wonder if that is legal in the US. So much about ethnic discrimination at Keysight.

I posted the contract so you can have a look.

Sebastian

God almighty, I don't think Keysight could have possibly chosen a bigger asshole to give a prize to. I thought you were making a joke when you started, but clearly you really are that arrogant, ungrateful, stupid, and angry. Now it's about "ethnic discrimination". Why am I not surprised that you view yourself as a victim?

Not being on the hook for any applicable taxes is a common clause in every international "giveaway". Keysight doesn't receive those funds, your government does, shallow thinker.

(also, they won't be paying for the electricity the scope consumes or a rental fee for the space taken up on your bench)

[Keysight DanielBogdanoff]

Hi Everyone (and Sebastien ),

As you all know, we've been working through how to make life easier for winners. Initially, we were communicating to winners that they might be responsible for more taxes than they actually are responsible for.

We've made it abundantly clear to both Sebastian and the other winners are ONLY RESPONSIBLE FOR THEIR OWN LOCAL TAXES!  Not USA taxes, not Malaysian taxes, just local taxes.  I believe Germany is just 19%.  Also, you may have seen that we have been talking to winners to potentially substitute a lower cost scope for the 1 GHz model if they desire.  This is a case-by-case offer, we'll talk if you win.

Good luck to everyone!  I'll do my best to keep up with the forum and update you guys as appropriate.

-Daniel

[GlowingGhoul]

I believe awarding the prize is at Keysight's discretion, according to the terms.

Given the unwarranted, vicious bashing of Keysight by this "winner" I would withdraw the prize an pick another winner.

Why would you want to reward someone who's slandering your company?

[Howardlong]

the main reason I opened the topic was to warn others that are not aware that winning the contest could ruin their life.

Drama queen. You don"t even know you're going to be charged a penny in local tax by your government (not Keysight) anyway, and you're bleating on about it. Indications now are that it may well come from your local distributor with no taxes due from you at all.

Even if you are to be charged tax, re-read the options I gave you. Which one of them is going to ruin your life exactly?

I do not think what they do is fair

You win a $20k+ prize and you don't think it's fair? FFS!

ethnic discrimination at Keysight.

With that last comment you don't deserve any prize and should not accept it, and let someone else have the opportunity. If you had any clue, rather than making wild accusations, you would realise that there are local laws restricting games of chance, and to make it work in certain jurisdictions you have to make it a game of skill. Far from deliberately discriminating, the organisers are trying to be more inclusive. At the very least you should apologise and withdraw the accusation.

[Wuerstchenhund]

It is not that simple. Actually there can be up to four kind of taxes at play here depending on local laws:
- Import duties
- VAT
- Income taxes
- Gambling taxes

Import duties and VAT can be handled by Keysight if they deliver the price through a local dealer or a dealer which is in the same VAT area (like the EU). But then there are still income and/or gambling taxes.

It is really that simple.

Income tax is tax on financial income, earned or not earned. Winning a scope is not a financial income, not in the US and not in the EU, and hence there is no income tax due on goods won at sweepstakes.

Gambling taxes which exist in some countries is a tax that is due when gambling in a gambling facility (like online casinos, real casinos, non-free sweepstakes, lotteries and such). Free sweepstakes like the Keysight one don't fall under gambling because the punters don't pay to participate or pay to win, which is pretty much the core of gambling. There are a few other regulations (i.e. some countries require that there are conditions on participating, i.e. answering a very simple question) but at the end of the day the thing is that these sweepstakes are not gambling.

The only thing the winner could be hit with is import duty and VAT/sales tax. Import duty depends on a few factors, one of them where the scope was made, and if you're in the US or the EU, but in general there won't be any import duty for the scopes Keysight offers in their sweepstakes. VAT/sales tax has to be paid, but it pretty much depends on who acts as the importer - the winner or Keysight. Since Keysight has representations in most countries I guess they will act as a importer. If not then the winner is liable for it, it which case I'd ask Keysight what the declared value of the scope is (which should be noticably lower than RRP).

Everything else like gambling tax, inheritance tax, repatriation tax, bee keepers tax, Trump tax or any other tax that some people in this forum seem to be afraid of has no relevance to winning at these sweepstakes.

All this is pretty much a lot of noise about nothing, and it's disappointing that the OP has decided to start his silly rant instead of doing at least a basic fact check with the German Zoll and the Finanzamt. There's hardly a way better way to make yourself look like a complete moron

[GlowingGhoul]

It is not that simple. Actually there can be up to four kind of taxes at play here depending on local laws:
- Import duties
- VAT
- Income taxes
- Gambling taxes

Import duties and VAT can be handled by Keysight if they deliver the price through a local dealer or a dealer which is in the same VAT area (like the EU). But then there are still income and/or gambling taxes.

It is really that simple.

Income tax is tax on financial income, earned or not earned. Winning a scope is not a financial income, not in the US and not in the EU, and hence there is no income tax due on goods won at sweepstakes.

You're wrong. In the US and many other taxing jurisdictions prizes are a form of income, and are taxed as such. If the prize is non-cash, taxes are based on the cash value of the prize.

[Wuerstchenhund]

Income tax is tax on financial income, earned or not earned. Winning a scope is not a financial income, not in the US and not in the EU, and hence there is no income tax due on goods won at sweepstakes.

You're wrong.

You are right.

In the US and many other taxing jurisdictions prizes are a form of income, and are taxed as such. If the prize is non-cash, taxes are based on the cash value of the prize.

That's indeed the case, I just checked. The US does treat goods winnings as income. My bad.

But that is certainly not the case in the EU. There could be an income tax liability when/if the scope is sold later, but not because it was just won.

[mos6502]

It is not that simple. Actually there can be up to four kind of taxes at play here depending on local laws:
- Import duties
- VAT
- Income taxes
- Gambling taxes

Import duties and VAT can be handled by Keysight if they deliver the price through a local dealer or a dealer which is in the same VAT area (like the EU). But then there are still income and/or gambling taxes.

It is really that simple.

Income tax is tax on financial income, earned or not earned. Winning a scope is not a financial income, not in the US and not in the EU, and hence there is no income tax due on goods won at sweepstakes.

You're wrong. In the US and many other taxing jurisdictions prizes are a form of income, and are taxed as such. If the prize is non-cash, taxes are based on the cash value of the prize.

So how does the IRS find out about something you won in a foreign country? Unless you tell them, that is. In any case, you could still receive the scope, sell it, pay your taxes and keep the change.

The problem that the OP has is that he has to pay up front. When the scope arrives, he'll get a letter from the local customs office that tells him to show up there along with the invoice/proof of value. They'll ask for the 19% in cash. If he refuses to pay or can't pay, the package will be returned to the sender.

[rfeecs]

Somehow international tax laws aren't like Ohm's law. 

US taxpayers are subject to federal income tax, state income tax, state sales tax...

Canada is subject to 30% US federal withholding tax, possible state withholding.

Other countries, including Germany, have no US withholding:

US Tax Treaty Exemptions

The gambling income won by residents of certain countries is not taxable by the US pursuant to a tax treaty negotiated with that country. These countries are:  Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom.  Other countries may have a tax treaty with the US that reduces the 30% withholding tax rate.

Disclaimer:  I have no idea what I'm talking about.

Hopefully Keysight can minimize the hassle/expense.

[rx8pilot]

Somehow international tax laws aren't like Ohm's law. 

Ohms Law is based on physics which we (humans) do not get to negotiate. Tax laws are based on the whimsical thoughts and desires of the law makers on any particular day - generally absent of logic or fairness.

[rx8pilot]

I'm really hoping rx8pilot wins the next one, instead of yet another whiner who shouldn't have entered in the first place.

I like your style.....indeed I have planned ahead for the possibility of winning. That way, I can truly jump up and down if I am the lucky winner!

My little business needs a boost almost desperately. If luck provides that boost, Ill take it! I went out on a long limb getting into electronics design and manufacturing and it's a little scary right about now.

[ChunkyPastaSauce]

To me this all sounds like standard contest stuff and clearly stated in the rules:
"6. Taxes All federal, state and/or local income and other taxes and duties, if any, are the winner's sole responsibility"

They have to follow laws; if KeySight took the burden of taxes, they would have to figure regulations for each contest winner down to the local level AND figure out how to pay them in each area. That's not reasonably workable. Similar problems with trying to do the same going thru distributors, plus coordination overhead, plus additional cost overhead.

To me it sounds like people signed up for the contest without read the rules and not thinking about laws.

Don't think KeySight did anything wrong here, but maybe could have made the tax thing more upfront.

[Keysight DanielBogdanoff]

Hopefully Keysight can minimize the hassle/expense.

This is the goal!

[Keysight DanielBogdanoff]

I keep saying, I found mine in the dumpster. I did not win anything.

Companies send me free gear all the time, why Keysight can't do that to with the winners?, one word, lawyers.

I asked our _lawyers the same question!  Turns out laws regarding sweepstakes/contests/giveaways are different.  It's sad for everyone, but the upside is you get a scope!

[nctnico]

I keep saying, I found mine in the dumpster. I did not win anything.

Companies send me free gear all the time, why Keysight can't do that to with the winners?, one word, lawyers.

I asked our _lawyers the same question!  Turns out laws regarding sweepstakes/contests/giveaways are different.  It's sad for everyone, but the upside is you get a scope!

A simple way around it is to sell a scope for $1 to the winners.

[Keysight DanielBogdanoff]

A simple way around it is to sell a scope for $1 to the winners.

Tried it, the only thing that changes is that the prize value is $1 lower per scope.

Unless we offered everyone a $1 scope... 

[_Wim_]

Unless we offered everyone a $1 scope... 

I like that idea! Since the beginning of the scopemonth I have been wanting to buy one, and for that price, I will by a couple at least 

[mos6502]

I keep saying, I found mine in the dumpster. I did not win anything.

Companies send me free gear all the time, why Keysight can't do that to with the winners?, one word, lawyers.

I asked our _lawyers the same question!  Turns out laws regarding sweepstakes/contests/giveaways are different.  It's sad for everyone, but the upside is you get a scope!

A simple way around it is to sell a scope for $1 to the winners.

Haha. 

Do you think you you're the first one to come up with that? What do you think your chances of success are trying that on a German customs officer? I bet they get 20 guys like that every day. 

No, the simple way would be for Keysight to send the freaking scope to their local office or to their distributor. Because right now, it looks like they don't even take their own contest seriously. Hey, why not just dump the scope in a parking lot in Malaysia and let the "winner" come pick it up himself?

[rx8pilot]

A simple way around it is to sell a scope for $1 to the winners.

I have a number of customers in Germany and many other countries. They laugh at this, hold the package and investigate. When they find that you are a fraud, you get in big trouble, one of which is an immediate band on your shipments. Somehow, I don't think Keysight is willing to throw legitimate German business down the drain for a freebie promotional scope.

[joesixpack]

This is why I don't rely on the internet for tax advice.  I will say I'm afflicted with schadenfreude at reading the comments from people in socialist countries infuriated about paying taxes. 

In the US -

Yes, sweepstakes winnings are counted as income.  Keysight will send you a 1099-MISC in January of next year, which will end up on line 21 of your 1040.  You will have the rest of the year to scratch up the taxes, or sell the scope.  In most sweepstakes, they will give you the option of taking the cash value, as cash.  Depending on the state, they may be required to allow you to do this.

They've already said you could substitute a scope of a lower value.