The taxes of the lotteries that are played in Spain

The taxes of the lotteries that are played in Spain

Did you know that it is common for taxes to be paid on lotteries for everything gained from a certain amount?

The excitement of winning may blind our criteria, but, … certainly taxes have to be paid on lotteries in Spain as in many other countries.

If you did not know, we will inform you below. Of course if you really win, it will not hurt much to pay a few taxes.

Do I really have to pay taxes on lotteries?

Everything depends on the amount of the prize. It’s really funny!

For example, in Spain, all the prizes won in the various lotteries exceeding 2,500 euros must pay 20% of the total amount won, from those € 2,500 onwards.

Many may feel disappointed knowing that such a large sum of their money will go into taxes.

But this practice of Law is in force and it is important that you know it so that you will not be surprised if you turn out to be one of the happy winners in the lottery game.

An important detail to know is that the taxes paid on the lottery are Spain are directed to the Treasury, and has remained so for the past years.

To give you an idea of how much you get from the total of your prize in taxes we will give you the following example: if you win a prize of lotteries valued at 400,000 euros, you will pay in taxes 79,500 euros, (400,000 minus the first 2,500 € are 397,500 € , and 20% of this amount is € 79,500) if they were € 125,000 you would pay € 24,500, and if they were € 50,000 you would have to pay € 9,500 to the Treasury, following the same criteria.

Calculate lottery taxes

If you receive a shared prize and you think you saved yourself from paying tax because the division of the prize is less than 2,500 euros, you”re wrong.

Although what comes to your hands is less than the two thousand five hundred euros mentioned above, the tax will be paid according to the total prize, regardless of whether it is divided or who arrive.

When we tell you that you would have to pay, it is not something so literal, because you will be given the prize immediately deducting the tax, so that the rest of your hands will arrive and the lottery administration will keep the tax that must be paid to the Treasury to then make the corresponding tax payment.

So if you were always wondering what taxes are paid on lotteries in Spain? At last you know the answer, now, if you never asked and you are surprised by the fact that you must pay such amount, think that the prize that will reach your hands will be even greater than the tribute.

The same applies to the Christmas lottery, draw of REYES, and ultimately to all drawings that organize lotteries of the State, Autonomous Communities, National Organization of the Spanish Blind, Spanish Red Cross, and all those organizations that make draws of this type that are within Spain, or in which Spain participates, as is the case of the EuroMillions lottery.

Now, the taxes that are paid on lotteries in Spain have their limitations:

Withholding taxes on lotteries from Spanish residents.

If you have to receive a prize of some of the authorized lotteries in Spain, and you are resident in Spanish territory and also taxed by IRPF, at the moment of receiving the prize you are retained 20% of the amount exceeding the first € 2,500 of the prize, and that is all the taxation.

You do not have to declare it anywhere else for income tax purposes.

The tax (tax) is the withholding in the collection and ends with the payment of income tax.

Taxation of lottery taxes to non-residents in Spain.

If you are a foreigner but have purchased a ticket from some of the national lotteries and you have won an important prize. At the time of going to collect the prize, it will also pay 20% but will not be directly through withholding as in the case of residents in Spain, but must fill out a form in the same administration for tax purposes.

In the same way it will happen if you are a Spanish resident but you get a lottery that is not Spanish, for example the Euromillion, it will also pay 20% but through a form. See detail Tax Agency on this particular

Tax time

Keeping informed about the tax policies within your region is important, as when paying taxes, it is also important to know where they are going, as a curious fact we will make a quick summary:

Most of these are directed to social benefits, then health, education and other economic interests that the country can maintain at that time.

It is distributed by levels between the State, the autonomous communities and the Town Councils.

And, therefore, the payment of taxes on the lottery prizes works. We hope this information has been useful and has answered your questions about what taxes are paid on lotteries in Spain.