The million dollar question of the Christmas Lottery: how much does the Treasury stay if I get the fat one?

With the Christmas Lottery draw just around the corner, it is time to answer the million dollar question of these holidays: how much of the prize winners does the Treasury take?

This year the same rule as last year is maintained, so all winners of a prize of less than 40,000 euros will be free from paying taxes to the Treasury. From that figure, the winners will have to pay 20% to the Tax Agency.

From TaxDown They propose three practical examples of how much the disbursement will be in the case of being awarded the first, second and third prize.

For every tenth winner of the Christmas Prize with 400,000 euros, the first 40,000 euros will be exempt from tax. Of the remaining 360,000 euros, 20% will have to be paid to the Treasury, so 72.000 euros will go to the Tax Agency and 328,000 for the winner.

In the second prize, endowed with 125,000 euros, taxes will be paid on 85,000 euros (after subtracting the 40,000 that are exempt). That is, the Treasury will stay with 17.000 euros of the total and the winner will receive 108,000 euros.

And in the case of the winners of the 50,000 euros of the third prize, they must give the Treasury 2.000 euros (20% of 10,000) and they will keep 48,000 euros.

How are the Christmas Lottery prizes declared?

The CEO of TaxDown, Enrique García, explains that “the Christmas Lottery prizes have no impact on the income tax base” but that, nevertheless, the possible returns that this money obtained may generate to the winners must be declared, such as example bank interest. Therefore, the award must be included in the income statement next year 2022 “.

Once the tax doubts have been resolved, another classic remains to be resolved: what happens if I share my lottery ticket with friends or family?

As established by the Tax Agency, in the case of shared awards in which the prize is distributed among all participants, the 40,000 euros that are exempt must be distributed among all the beneficiaries in proportion to their percentage of participation, and whoever proceeds to distribute the prize that appears as the sole beneficiary (or as a collection manager), must be in a position to accredit before the Tax Administration that the award has been distributed to the holders of shares, therefore it is necessary to identify each winner as well as their percentage of participation.