| The law is clear – income from esports by professionals is taxable. |
There is a specific inclusion in the gross income definition (the definition used as the starting point to determine an individual’s taxable income) which states that amounts received in relation to services rendered – even if it is a voluntary award – will be included in gross income and subject to tax.
Since a professional esports athletes would either be seen as an employee of, or as an an independent contractor, of the company for which he/she plays (see The basics about contracts for esports athletes) if such employee receives a reward related to his job function, it will be considered gross income as it is linked to services rendered.
Thus winning prize money in a competition if you are a professional esports athlete would be seen by revenue authorities (SARS) as being related to a job function.
Whether the prize could be cash or otherwise, the prize will still be subject to tax.
If it is a non-cash prize, the monetary worth of that specific item will be included in gross income and subject to tax.
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