Supplier News
Spain – Spain’s tax on Lottery Prizes fails to deliver
By Phil - 8 August 2016
Spain’s Tax Office recorded a total of €295.8m between January and June from tax on lottery winnings; 12.2 per cent less than in the same period last year when the tax office collected €336.9m.
The bulk of this amount was collected via income tax.
The Tax Office collected $294.7m on prizes via income tax (12 per cent than last year) and a further $1.06m via corporate income tax ;46.1 per cent less than in 2015. The figures, which were part of the Monthly Revenue Report published by Servimedia, is bad news for the government which had hoped to raise significantly more via taxes on lottery prizes.
In 2012, Prime Minister Mariano Rajoy announced the government’s decision to introduce a new lottery tax of up to 20 per cent on prizes of more than €2,500 as the Spanish economy shrank and fell deeper into recession. The move was part of a number of spending cuts and tax increases introduced by the government to reduce debt, and the tax on lottery payouts was initially designed to raise an estimated €800m a year. However the measure has not delivered on its initial forecast.
In 2013 the government raised €268.2m in tax on prizes. The Christmas Lottery, otherwise known as El Gordo (The Fat One) Spain’s biggest lottery, was exempt from the tax that year as the draw took place in 2012 even though the prize was awarded in 2013. As a result tax derived from prizes rose in 2014 to €458.9m but decreased slightly to €451m in 2015. The latest figures mean that tax revenue generated from lottery prizes winnings will in all likelihood continued to fall this year.
