Special tax on lottery prizes and bettings

Regulations:Additional Provision Five of IRNR Law

Taxation

Prizes won through State, Autonomous Community, Spanish National Organisation for the Blind and Spanish Red Cross lotteries will be subject to non-resident income tax by means of a special levy.

The following prize amounts are exempt from taxation:

• For prizes derived from games and draws held before 5 July 2018, the exempt amount will be 2,500 euros.

• As of 5 July 2018, inclusive, the exempt amount is 10,000 euros;20,000 euros for awards derived from games held in 2019;and for awards given as of 1 January 2020, the exempt amount is 40,000 euros.

Any awards higher than these amounts are taxed according to the difference.

Gross tax base

The taxable base will consist of the amount of the prize which exceeds the exempt amount.

If the prize should be shared, the taxable base will be distributed between the co-owners according to their respective shares.

Liability

The tax will be accrued at the time when the prize is paid.

Withholding or payment on account

Prizes subject to the special tax, even if exempt by virtue of the rulings of any applicable agreement to avoid double taxation, will be subject to withholding or on-account payment.

The base for withholding will be determined by the amount of the taxable base of the special tax.

The percentage of withholding or payment on account will be 20%.

The withholdings will be deposited using form 230 and will be included on the annual informative tax return, form 270

Filing the special tax return

The winners of prizes subject to the special tax must file a return (form 136) for this tax.

However, there is no obligation to submit this tax return when the prize won is less than the exempt amount, or the relevant withholding or on-account payment set out in the above section has already been made.

When amounts have been paid into the Treasury, or withholdings have been made on account for this special tax, in amounts greater than those deriving from the application of a double taxation avoidance treaty (in most cases because these prizes are taxed exclusively in the country of residence), this application and the consequent refund may be requested by filing self-assessment form 210 (sub-section G) in the form, place, deadlines and with the documentation established for this self-assessment (see Chapter 5.Declaring income not obtained through permanent establishment by non-residents).

In self-assessment form 210, code 31 shall be indicated as the type of income.

In the sphere of non-resident income tax, prizes won by taxpayers without there being permanent establishment may only be taxed through this special tax.