Information note 7. Evolution of lottery taxation in recent years

The Special Tax on Prizes from Certain Lotteries and Bets has been in effect since January 1, 2013. The prizes paid by the draws of the lotteries and bets organized by the State Society Loterías y Apuestas del Estado, by the bodies or entities of the Autonomous Communities, by the Spanish Red Cross and by the games authorized to the National Organization of Spanish Blind People are subject to the tax. The tax also includes prizes from lotteries, bets and raffles organized by entities from other members of the European Union or the European Economic Area that have the same objectives as the aforementioned bodies.

The tax is due when the prize is paid. At that moment the paying entity withholds a amount. This withholding is of a liberating nature, so the recipient of the prize should not include it in their taxable base when subsequently settling the IRPF (Personal Income Tax).

An analysis of the levy from its inception can be performed using Table 2.7 of the accompanying file. Annual Tax Revenue Report. The current year and monthly details of income can be tracked using the file "Statistical Tables and Series of the". Monthly Tax Collection Report. The following graph shows the annual evolution of the main variables.

The applicable rate has always been 20%. In contrast, the tax base has varied over time. The rule sets an exemption threshold that started at 2,500 euros and, since mid-2018, has been increasing to the current 40,000 euros. This change explains why the separation between the prizes and the base increases in the graph. This separation also varies depending on how the prizes are distributed: The smaller these are, the smaller the base and the greater the difference between the two lines.

Table 2.7 cited above also serves to clarify a doubt that often arises when analyzing the tax data in relation to other taxes. The majority of the tax is levied on individuals (since 2013, slightly over 94%) and is therefore classified within the PIT. However, what usually attracts attention is the fact that there is income from this concept in the Corporate Income Tax. The explanation is simple: Almost all of these prizes included in the Corporate Income Tax correspond to associations and similar entities that, although not companies, are required to file the tax. In years when a major prize is won by one of these associations, clubs, fraternities, or similar organizations, it is observed that part of the revenue goes to Corporation Tax instead of being allocated to the IRPFABBR as usual.

Another issue that raises doubts is why, given that the Christmas lottery is the most popular and the one in which the most is wagered, the funds raised are not accumulated in the month of December. To clarify this point, it is important to note that there are three relevant dates in the process: the date of the draw, the date of the prize payment (which is, in turn, the date of the tax accrual) and the date of the tax payment (which is the period in which it appears in the collection).

If an analysis is made of the income accrued by date of the draw, it can be seen that the income accumulates in two months, in December (on average for the period 2013-2025 they represent 39% of the total) and January (11%). In the remaining months, 5% of the total is accrued. The same conclusion is reached when analyzing revenue: 50% of the revenue is generated in January and February, and the other months account for approximately 5% in a very homogeneous way. The difference between the December-January accrual period and the January-February collection period is explained, on the one hand, by the difference between the date of the draw and the time when the prizes are paid and, on the other hand, by the difference that usually exists between the accrual time and the cash register recording time. The latter is well known and affects virtually all taxes. In contrast, the difference between the date of the draw and the time of payment of the prize is particular to this tax.

Overall, on average since 2013, around three-quarters of the prizes were paid out in the same month as the draw and more than 96% between that month and the next. The following chart shows the average percentages for draws held between 2013 and 2025.

This means that the revenue seen in any given month is a mixture of prizes paid in draws held in different months. The revenue for month T does not include prizes paid for draws held in month T-1, but rather prizes paid in the previous month, regardless of the draw date. It should also be noted that, although averages are shown, the payout percentages in the month of the draw or in the following month may vary from year to year. This is precisely what happened in the Christmas draws of 2023 and 2024, a circumstance that caused a change in the relative importance of the revenue from January and February. Traditionally, January's revenue exceeded that of February, but in 2024 both months had similar revenues and in 2025 February's revenue was higher than January's. In 2026 the distribution was more similar to that observed in the years prior to 2024. The following chart, which is the same as the previous one but specific to the Christmas lottery, perfectly illustrates the reason for these changes: In 2023 the payment pattern changed moderately, in 2024 it changed substantially, and in 2025 the previous pattern was largely recovered.

The consequence of what happened in the 2024 draw was the shift to February of the revenue that was previously scheduled for January. This effect can be seen in more detail in the last chart which shows the accumulated prize payments for the years 2022, 2023 and 2024 in the 30 working days following the draw (the vertical line indicates the end of December). As you can see, in 2024 there was a considerable group of prizes that were collected in the first days of January.