Spain’s Christmas lottery winners may soon lose tax-free perks under new reform push
Spain’s Christmas lottery draw will distribute €770 million in prizes this year. Winners face different tax rules depending on the amount. The first €40,000 remains tax-free, but anything above is taxed at 20%.
Now, a Spanish tax union is pushing for changes. Gestha argues that current exemptions create unfair advantages and may encourage tax avoidance.
Under existing rules, the first €40,000 of any lottery win is free from tax. Any sum beyond that is taxed at 20%. This year’s top prize pays €200,000 per tenth share, meaning winners will lose a portion to tax. The second prize of €75,000 also faces deductions, while the third prize of €25,000 is paid in full with no withholding.
Gestha, a union of Spanish tax inspectors, claims these rules unfairly favour certain lotteries. Since 2013, Christmas lottery wins over €40,000 have been tax-free, while other lotteries face different rates. The group wants the tax-free limit cut to €2,500 for state, regional, ONCE, and Red Cross lotteries to boost revenue. The union has also flagged concerns over large payouts to non-residents and legal entities. In 2024 alone, non-residents collected €246.7 million in big prizes. Between 2021 and 2024, corporations, foundations, and associations received €243.7 million in prizes over €40,000. Gestha is calling for investigations into these payments, warning they may exploit loopholes. Additionally, lottery wins exceeding €40,000 must be declared in Spain’s Wealth Tax if they surpass regional minimums. Gestha argues this creates inequality, as the system treats different winners inconsistently. The group insists reforms are needed to align with Spain’s constitutional principle of tax fairness.
The current system allows some winners to keep large sums tax-free while others face deductions. Gestha’s proposals aim to close gaps and ensure fairer taxation. If adopted, the changes could affect future payouts and increase state revenue.
