As the Christmas lotteries approach, excitement is reignited across Spain: millions are buying tickets, dreaming of instant riches. Yet few realize that the real winner of the holiday draws isn’t the lucky ticket holder, but the state treasury. Every year, Spain’s tax authority (Agencia Tributaria) collects a substantial slice of the prize fund, leaving winners with only a share of their fortune.
How lottery winnings are taxed
In 2025, the taxation rules for lottery winnings remain unchanged. Any prize exceeding €40,000 is subject to a fixed 20% tax, which applies only to the portion above this threshold. If the prize is less than €40,000, no tax is due, provided the ticket cost at least €0.50. For tickets costing less, the non-taxable amount is reduced proportionally.
For example, if you win €60,000, the tax office will withhold €4,000 (20% of €20,000), and the winner will take home €56,000. If the prize is €100,000, the tax climbs to €12,000. And should you strike it lucky with €100 million, the state will claim nearly €20 million.
Special rules for group lottery wins
In Spain, it is common for people to buy lottery tickets as a group. In such cases, the tax-free amount is divided among the participants according to their share. However, if one person collects the winnings and then distributes the money to others, this is considered a gift, making it subject to gift tax, which can be much higher.
It is important to prepare all documentation confirming joint purchase in advance to avoid unpleasant surprises when claiming your winnings. Otherwise, the tax authorities may demand additional payments, significantly reducing the final payout.
Which lotteries are subject to tax
The tax on winnings applies not only to the famous Christmas lottery, but also to other national and regional draws, as well as lotteries run by charities such as the Red Cross (Cruz Roja Española) and the National Organization for the Blind (ONCE). In addition, prizes organized by similar institutions in other EU and EEA countries are also taxed, provided they are not for commercial purposes.
All other winnings that do not fall into these categories are considered capital gains and should be declared in your personal income tax return according to standard tax rules.
When and how the tax is withheld
The tax authorities do not wait for the winner to submit a declaration. At the time the prize is paid out, the bank or another authorized institution automatically withholds 20% of the amount exceeding €40,000. As a result, the winner receives a ‘net’ sum, while the government is guaranteed its share.
If, for some reason, the tax was not withheld upon payout, the winner must submit a special declaration using form Modelo 136. However, such cases are extremely rare, since payouts are strictly monitored.
Is it necessary to declare lottery winnings in the tax return?
Winnings subject to the special gambling tax are not included in the general income tax base. The only exception is when the prize is not covered by the special tax—in that case, it must be declared as regular income.
If the prize is completely exempt from tax (for example, if it does not exceed €40,000), you do not need to indicate it in your tax return. But if tax has already been withheld, no further action is required—the government has already received its share.
Examples of tax deductions from different prizes
For clarity, here are calculations for the main Christmas Lottery prizes in 2025. The top prize (‘El Gordo’) of €400,000 will net the winner €328,000 after €72,000 is withheld in taxes. The second prize of €125,000 drops to €108,000, and the third prize—from €50,000 to €48,000. Prizes of €20,000 and below are not taxed and can be collected in full.
Interestingly, part of the funds entering the budget come from unclaimed winnings. If a winner fails to claim their prize, the money remains at the disposal of the state.
A word about Spain’s tax authority
Agencia Tributaria is the key agency responsible for tax collection and oversight of financial flows in the country. Established in 1992, it has since become an integral part of Spain’s economic system. Its duties include not only tax administration but also combating tax evasion and monitoring lottery and gaming revenues. Every year, the agency rolls out new technologies to track financial transactions, minimizing budget losses. In recent years, the tax authority has actively collaborated with banks and other financial institutions to ensure transparency for all major payments, including lottery winnings. Thanks to these measures, the state consistently collects significant amounts from gambling activities, and citizens can be confident that taxes on their winnings will be withheld automatically. Still, many people continue to hope they can outsmart the system, but experience shows: the tax office is always one step ahead.
