Prizes paid corresponding to lotteries and bets organised by Sociedad Estatal Loterías y Apuestas del Estado (SELAE) are subject to taxation through a special tax (L 16/2012).
This regulation establishes that the recipients of these prizes, whatever their nature, at the time of collection, are subject to a withholding or payment on account that must be made to them by the body paying the prize, i.e. SELAE. This is required separately for each winning lottery ticket, fraction or lottery coupon or bet.
On the other hand, prizes whose full amount is equal to or less than €10,000 are exempt. Prizes whose full amount exceeds €10,000 are only taxed on the part of the prize that exceeds this amount.
The base of the special tax withholding is formed by the amount of the prize that exceeds the exempt amount. The percentage of withholding or payment on account is 20%.
Thus, for example, a prize of 100,000 euros is taxed at 20% on 90,000 euros (100,000 - 10,000), so that a withholding of 18,000 euros is made and 82,000 euros would be received.
SELAE must identify the winners of the prizes subject to taxation, i.e. those that are greater than €10,000 per tenth, regardless of whether the prize was won by a single person or jointly by several persons or entities.
In the case of shared prizes (group of friends or relatives, clubs, brotherhoods...), in which the prize is shared among all the participants, the €10,000 that is exempt must be distributed among all the participants.10,000, which is exempt, among all the beneficiaries in proportion to their percentage of participation, and whoever distributes the prize who appears as the sole beneficiary (or as the collection manager), having declared this at the time of collecting the prize, must be able to prove to the tax authorities that the prize has been distributed to the holders of the shares, and it is therefore necessary to identify each winner and their percentage of participation.
Winning IRPF taxpayers or non-resident taxpayers without a permanent establishment who have paid the withholding at the time of payment of the prize do not have to file any other self-assessment tax return.
In addition, non-resident taxpayers without a permanent establishment who win a prize and have paid the withholding at the time of payment of the prize may apply for the refund that may correspond to them under an international double taxation avoidance agreement.
IS taxpayers who obtain a prize subject to the special tax must include, as they did before 1-1-2013, the amount of the prize among the income for the period subject to the tax and the 20% withholding/payment on account paid as a further payment on account.
Source: AEAT
