There is very little left for the 2024 Christmas Lottery draw to be held this Sunday, December 22, at which time the Tax Agency has released a statement to inform taxpayers, specifically the draw participants, about what it has what to do with the collection of prizes and withholdings that are collected by law.
Specifically, the standard is included in the Law 16/2012, of December 27by which various tax measures are adopted aimed at consolidating public finances and promoting economic activity, subjects to taxation, through a special tax, among others, the prizes paid corresponding to lotteries and bets organized by the State Lottery and Betting Society (SELAE).
“They will bear a withholding or payment on account that must be made by the organization paying the prize”
This aforementioned law establishes that “the recipients of these prizes, whatever their nature, at the time of collection, will bear a withholding or deposit on account that must be carried out by the organization paying the prize, that is, the SELAE.” “It will be required independently with respect to each winning tenth, fraction or lottery or bet coupon,” adds the Tax Agency.
The 40,000 euros exempt
An important fact about the Christmas Lottery game is that the prizes will be exempt from these tax withholdings. whose full amount is equal to or less than 40,000 euros. On the contrary, prizes whose full amount exceeds 40,000 euros will only be taxed on the part that exceeds those 40,000 euros.
“The base of the withholding of the special tax will be formed by the amount of the prize that exceeds the exempt amount. The percentage of withholding or deposit on account will be 20%”, adds the Treasury, which shows an example: “A prize of 100,000 euros would be taxed at 20% on 60,000 euros (100,000 – 40,000), so a withholding of 12,000 euros would be made and 88,000 euros would be received.”
SELAE will identify the winners
The Tax Agency It also explains that it will be SELAE who must proceed to identify the winners of the prizes subject to tax, that is, those that are greater than 40,000 euros per tenth, regardless of whether the prize has been obtained. by one person or jointly by several people or entities.
In the case of shared prizes (group of friends or relatives, clubs, brotherhoods…), in which the prize is distributed among all participants, the 40,000 euros that are exempt must be distributed, among all beneficiaries in proportion to their percentage of participationand whoever proceeds to distribute the prize who appears as the sole beneficiary (or as collection manager) having so stated at the time of collecting the prize, must be able to prove to the Tax Administration that the prize has been distributed to the share holders, Therefore, the identification of each winner is necessary. as well as their percentage of participation.
Personal income tax taxpayers or non-resident taxpayers without a permanent establishment who are successful and have borne the withholding at the time of payment of the prize will not have to present no other self-assessment.
Additionally, non-resident taxpayers without a permanent establishment who are eligible and have borne the withholding at the time of payment of the prize may request a refund that may correspond to them by application of an agreement to avoid international double taxation.
Corporation Tax taxpayers who obtain a prize subject to the special tax must include, as they did before January 1, 2013, the amount of the prize between the income of the period subject to tax and withholding/payment on account of 20% borne as one more payment on account.
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