HOW MUCH TAX TO PAY IN SPAIN FOR LOTTERY, EL GORDO, EL NIÑO, BINGO?
In Spain there is a long and extensive tradition in lottery games and others such as “ONCE” (association to help disabled groups),” Quiniela” (Soccer), “La Primitiva”, and others such as “Euromillón”, etc. Some of these games, such as the Once, or the National lottery, the Red Cross, etc. are deeply rooted and very traditional in Spain.
The best known internationally are the National Lottery draws that are held at Christmas, known as “El Gordo” and “El Niño”, which are especially attractive due to the high amount of the prize.
The popularity of these lotteries is so great that their participation has become international, and it is very common for citizens of all nationalities and origins to bet on these games.
For this reason, in order to inform all those who decide to bet on the lottery and other Spanish games of chance, it is advisable to take into account the fiscal and tax consequences of the prizes obtained.
SPECIAL TAX ON GAMING-LOTTERY PRIZES
– Tax Base
Historically, income obtained through lottery prizes has been exempt from tax in Spain.
However, over time, the profits obtained have been progressively taxed. The latest regulations in this regard establish as a general rule thatthere is a tax-exempt amount of up to 40,000 EUR.
Therefore, the tax base for the prizes obtained that do not exceed this value will not pay taxes. And all those that exceed this amount will only be subject to taxes for the amount that exceeds this amount.
In this regard, it is important to highlight the figure of the “copayment”. In other words, these are cases in which two or more people decide to play the game ticket as a group. In these cases, it is necessary that all participants keep sufficient documentary evidence to prove what part of the prize belongs to each one, since, otherwise, the entire prize will be assigned to the person who holds the original ticket.
– Tax rate:
The tax rate to be applied will be 20% of the tax base.
This tax is paid in Spain, both for Spanish tax residents and non-residents.
For this, the Spanish organizations that pay the prizes are obliged to apply the 20% tax on the amounts to be paid. In this way, at the moment in which the winner of the prize cashes the prize, he will only receive the net amount of the prize on which the 20% tax on the tax base will have been previously deducted.
In the event that the winner is a NON-RESIDENT for tax in Spain, he will receive the net amount after the 20 % retention, and also, he will be obliged, at the time of collecting the prize, to fill out a form / declaration before the corresponding paying agency.
In this form, the winner of the prize must confirm if he opted for it individually or in a group with others. In the event that he has collaborated in the game with other people, he must identify and fill in the data and the prize share that belongs to each of them. Failure to do so, that is, if the collector of the prize does not indicate that it is shared, and collects it on his behalf and then distributes it among the rest of the group, said distribution may be considered a “donation” and be subject to tax. Spanish donations, with very important tax repercussions.
OTHER GAMES – BINGO- RAFFLES – BETTING – CASINO
The rest of the income or profits obtained from games other than the aforementioned lotteries, of private origin, will not be subject to the State Lottery and Betting Special Tax, for which reason they will be subject exclusively to the Spanish Income Tax and will be considered as “capital gain”, with an exempt amount of EUR 300.
In the case of NON-RESIDENTS in Spain, the fee to be paid will be:
– 19% for residents of EU countries + Iceland + Norway
– 24% for the rest
In these cases, at the time of payment of the prize, the paying body will be obliged to withhold 19% of the prize as a withholding on account of the final payment of the tax.