Taxation of the Christmas lottery
If you have purchased a ticket for the National Lottery Christmas draw, do not forget that prizes awarded by Loterías y Apuestas del Estado, autonomous communities, ONCE, the Spanish Red Cross and similar European entities are taxed at a fixed rate of 20%.
For this purpose, the recipients of these prizes, at the time of collection, are subject to a withholding or payment on account for this percentage, which must be made by the body paying the prize, i.e. the State Lottery and Gambling Company (SELAE).
However, remember that from 2020 this taxation only affects prizes whose full amount exceeds 40,000 euros, which are taxed on the amount exceeding this limit (up to 40,000 euros, they are exempt).
This exemption has been increased from the 20,000 euros applicable in 2019 to 40,000 euros applicable from this year onwards.
Please note that the exemption applies separately in respect of each winning lottery ticket, fraction or lottery coupon or bet.
Thus, in the case of shared prizes (group of friends or relatives, clubs, brotherhoods…), in which the prize is shared among all the participants, the 40,000 euros exempted must be distributed among all the beneficiaries in proportion to their percentage of participation.
In this way, if you and a friend play half a 2020 Christmas Lottery ticket with a prize of 50,000 euros, you will each be entitled to 25,000 euros, of which 20,000 will be exempt.
In this case, their individual taxation will be 1,000 euros: (25,000 – 20,000) x 20% (the net amount received by each of them will therefore be 24,000 euros).
Lottery prizes are taxed for personal income tax purposes at a flat rate of 20%.
However, from 2020, the first 40,000 euros will be exempt from this tax.
Frequently asked questions
How much tax do you pay on a lottery prize?
State lottery and betting prizes are taxed under personal income tax (IRPF) at a flat rate of 20%.
What part of the prize is exempt?
The first €40,000 are exempt; only the amount above that limit is taxed, and the exemption applies per ticket, fraction or coupon.
Who withholds the tax?
The body paying the prize (the State Lottery and Betting Company, SELAE) applies the withholding at the time of payment.
How is a shared prize taxed?
The €40,000 exemption is split among all beneficiaries according to their share. For example, a €50,000 prize split in two is €25,000 each, of which €20,000 are exempt: each person pays €1,000 (25,000 - 20,000 × 20%).