Special tax on lottery prizes and betting

Regulations: Additional provision fifth IRNR Act

Taxation

The prizes of the State lotteries, Autonomous Communities, the Spanish National Organization of Blind and the Spanish Red Cross will be subject to the Income Tax for Non-Residents by means of a special levy.

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 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 will be no obligation to file the aforementioned tax return when the prize obtained was less than the exempt amount or the withholding or payment on account provided for in the previous section has been made in relation to it.

When amounts have been deposited with the Treasury, or withholdings paid on account for this special levy, in amounts greater than those derived from from the application of a convention to avoid double taxation (in most cases for paying these prizes exclusively in the country of residence), this application may be requested and the subsequent refund may be made by filing the 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.