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Spain Taxes Lottery Winnings

Fri 28th Sep 2012
Spain Taxes Lottery Winnings

Under a harsh new budget for 2013, the Spanish government will introduce a new lottery tax of up to 20%.

The new tax will affect prizes of more than €2,500 and is expected to raise more than €800 million for the taxman as the government attempts to shore up its finances.

Economists have praised Spain for taking a tough stance on its finances through harsh austerity and cuts, however the lottery winnings tax may see the government hauled through the European courts.

Christmas Gift Lists

The problem is that state run lottery organization ONLAE, who is a founding partner of Europe’s mega jackpot lottery game “Euromillions”, has a captive audience in Spain and players cannot shop around for the best deal.

Tickets bought through UK Euromillions partner Camelot are taxed at point of sale so prizes are tax free. However tickets cannot be bought from the UK lottery entity unless you are physically within the British Isles at time of purchase, even when bought online.

Other member countries do the same with the exception of Switzerland.

In this context, a Euromillions prize above the new minimum tax threshold of €2,500 would be subject to tax, but not be equal to the same prize won in another European country.

This would not be the first time Spain has been taken to the European courts of Justice over it's taxation policies concerning lotteries and gaming.

In 2007, the EU Commission brought a case against the government over it's taxation policy favoring home based lottery organisations to the European Courts of Justice.

Favourable taxes were applied to it's state owned lottery company, in addition to other lottery and gaming entities in Spain, however non-Spanish european entities were subjected to different taxation rules making them uncompetitive.

Competition regulators threw the book at Spain citing anti-european and anti-competitive taxation.

Food for Thought...

Adrian Bayford and his wife Gillian scooped £148 million (approx. €190 million) earlier this year in the mega lottery which had rolled over several times.

Had be bought the ticket in Spain under these new taxation rules he would have lost almost £30 million (approx. €38 million) in tax.

Recommended Reading

Wiki - Euromillions Lottery

EU Commission Case: 2005/2431 - Spanish Lottery Tax Discrimination

Comment on this Story

 
Having had a good win on the Spanish Bonoloto and having been taxed 20% on the whole amount I would love to challenge the legality of the Spanish government in this matter. Is there anybody out there who would like to challenge this tax ?
David Sheppard - Wed, 18th Jun 2014
Just another example that the term 'one Europe' is a farce.
Mark Langton - Sun, 23rd Jun 2013
If they charged the appropriate tax upon sale of the ticket, much like they do in the UK, instead of giving concessions to the Spanish Lottery Company so they can be competitive, then everything would be much fairer!! Yet again, it's the average Joe in the street who has to pick up the tab for the failings of the rich and powerful!
Ed Bishop - Sat, 22nd Jun 2013
I don't think they will get away with it and why should they, if they want to raise more revenue they should look at the black money changing hands between Spaniards thus avoiding paying tax, look closer to home SPAIN.
Steve Busby - Sat, 22nd Jun 2013
Very difficult. Spain undoubtedly needs money. But how much and from where? I would not object to a reasonable tax on a very big win, but 20% from as little as 2,500 is punitive. I don not think the tax should start below 10,000, and then it should start at 10%. Spain could solve most of its problems by sorting out its corrupt local governments, builders, legal rogues, and all the thousands of tradesmen who will only work for cash in hand. Job done! Taffy.
Charles Isaac - Thu, 11th Oct 2012
An informative article, but the "it's" instead of "its" just jumped out and hit me everytime I read it. How can a professional writer get this wrong?
Skin Slayer - Sat, 6th Oct 2012
SURELY THE LOTTERY TAX IS A JOKE ITS STEALING PEOPLES DREAMS THINK AGAIN THIS WILL AFFECT GOOD CAUSES THE VERRY THING IT WAS SET UP FOR. TAKE A LOOK AT THE BANKERS LARGE HOUSES AND CARS AND TAX TAX TAX.
Peter Hall - Fri, 5th Oct 2012