Special tax on lottery prizes and betting

Regulations: Fifth Additional Provision Law IRNR

Taxation

Prizes from the lotteries of the State, Autonomous Communities, the Spanish National Organization for the Blind and the Spanish Red Cross will be subject to Income Tax for Non-Residents through a special tax.

The following prize amounts are exempt from taxation:

• For awards derived from games that took place prior to 5 July 2018, the exempt amount is 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.

Taxable 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.

Accrual

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 retention or payment on account percentage 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 will be no obligation to submit the aforementioned declaration when the prize obtained was of an amount less than the exempt amount or the withholding or payment on account provided for in the previous section was made in relation to it.

When amounts have been paid into the Treasury, or withholdings have been made on account of this special tax, in amounts greater than those derived from the application of an agreement to avoid double taxation (in most cases because these prizes are taxed exclusively in the country of residence), said application and the consequent refund may be requested by submitting self-assessment form 210 (subsection G) in the form, place, timeframes and with the documentation established for said 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.