Winners of the second and third prizes, along with the major prize in the Christmas Lottery draw, will face a tax duty corresponding to 20 percent of the profit that surpasses a 40,000 euro threshold. The first 40,000 euros remain tax-free under current regulations.
All prizes offered by the State Lottery and Betting Society, known as Selae, follow the tax guidance posted by the Tax Agency. Any portion of a prize that exceeds 40,000 euros, including the special Christmas draw held this Friday, is subject to a special withholding tax at the moment of payment. This ensures winners do not face post-payment obligations in most situations.
Under the present rules, prizes below 40,000 euros escape the special lottery tax. Prizes above this amount incur a 20 percent tax on the portion that exceeds 40,000 euros, in addition to determining the final prize for the winner. For instance, if the top prize is 400,000 euros, the initial 40,000 euros is exempt. The remaining 360,000 euros are taxed, resulting in 72,000 euros going to the Treasury and 328,000 euros going to the winner.
Similarly, an 85,000 euro prize is taxed, while a 125,000 euro prize would not be exempt. In that case, the Treasury would retain 17,000 euros and the winner would receive 108,000 euros. Winners of the third prize amounting to 50,000 euros will pay 2,000 euros in tax and keep 48,000 euros. Other prizes under the threshold remain exempt from the special lottery tax.
The Tax Agency explains that when prizes are shared among friends or family, the tax-free 40,000 euros must be distributed in proportion to each person’s participation. The designated recipient from the sharing group acts as the sole beneficiary or collection agent and must be prepared to demonstrate to the tax authority that the distribution was carried out and to identify all participants in the share.
Since 2013, prizes from State Lotteries, regional authorities, ONCE, the Spanish Red Cross, and similar European organizations that exceed a defined threshold have been taxed at 20 percent. That threshold has changed over time, increasing from 2,500 euros in 2017 to 10,000 euros in 2018, 20,000 euros in 2019, and 40,000 euros from 2020 onward. In 2022, the special lottery tax collected roughly 364 million euros.
Christmas Lottery 2023 offers a clear chance to see how these rules apply in practice. On December 22, participants can verify whether their tenth ticket secured a prize and review the full results of the 2023 Christmas Lottery.