Today is the Christmas draw of the National Lottery. Let’s keep in mind that:
- Prizes of less than €2,500 are exempt from income tax.
- From 2,500 euros, prizes are taxed at 20%.
Consequently, in order to calculate the IRPF taxation of a prize of more than €2,500, this amount must be subtracted and the rest multiplied by the tax rate of 20%.
Example:
Jackpot: 400,000
Exempt: 2,500
Tax: 20% x (400,000-2,500) =79,500
Net: 320,500
The lottery organization is in charge of paying the tax withheld to the Treasury, so the taxpayer does not have to file a self-assessment and does not have to declare it in his Personal Income Tax (IRPF).
In the case of non-residents of Spain, a refund of the withholding tax paid may be requested in the event that the applicable double taxation avoidance agreement declares the prize obtained to be exempt.
Another important question is how to invest the money received. Recent banking practice advises you to seek advice from a professional independent of the banks, who will monitor the investment and look after your interests, which need not necessarily coincide with those of the bank.
In this regard, our firm collaborates with an independent financial advisory firm (EAFI) registered with the CNMV. If you need more information or want us to advise you personally, please contact us at: info@morodoabogados.com