The technicians of the Ministry of Finance (Gestha) claim that the minimum exempt from the Lotteries, Once and Red Cross prizes to the first 2,500 euros, as it was established until mid-2018. Currently the exempt minimum is 40,000 euros. In their opinion, they see no justification for not paying a profit of chance of 40,000 euros, but the minimum vital income or a subsidy of 1,000 euros does.
Likewise, the technicians estimate that the treasury will enter 19.5 million euros for the prizes of the special El Niño draw, provided that all the tenths of the first and second prizes are sold, the same figure that was estimated for 2019, as indicated it’s a statement.
In the El Niño draw, a total of 700 million euros will be distributed, according to the data provided by the State Lottery and Betting Society of the State (Selae), and on this occasion only the first two prizes are taxed, which amount to 200,000 and 75,000 euros, respectively. Thus, the winners of the third prize will receive a full 25,000 euros.
Gestha has pointed out that the winners who share a prize greater than 40,000 euros will have to pay the Treasury the part corresponding to their participation, “even if this is less than that figure”, since “the tax is required on the amount that exceeds the 40,000 euros of the tenth prize winner, being indifferent as long as they participate ».
They have also recalled that the prizes have no impact on the income tax of the winners. Nor does it affect to request scholarships, assistance benefits or other public aid that depend on income and not on assets, since «the amount of the award is not included in the income tax base, although it must be included in the Wealth Tax if it reaches the regional minimum to present it ».
Gestha has also warned that foundations, associations and non-profit organizations multiplied the Lottery prizes by eight, mainly from the Christmas and ‘El Niño’ draw, reaching 427.7 million euros in 2019. «A Despite the fact that in 2019 the number of prizes subject to lottery tax decreased by almost half, by 42% due to the increase in the exempt minimum of each tenth winner from 10,000 euros to 20,000 euros, in 2019 entities and companies entered 374 , 8 million more, an increase of more than 700% “, according to the technicians.
Suspicious awards may be investigated
Gestha has repeatedly warned that the collection of prizes by entities and companies was skyrocketing and has insisted that the management of the Tax Agency allow them to open a tax investigation program and money laundering to foundations, associations and others non-profit entities that accumulate 99.5% of the prizes obtained by legal entities, as well as people who win great prizes in different raffles.
This year, for the first time, they will be able to investigate the “suspicious awards”, when the tax fraud prevention law that is being processed in Congress enters into force, which will allow the AEAT to “immediately know” the awards paid with or without retention, identify the winner, the dates of the draw or bet and the payment of the prize, among other data.
Change the Corporation Tax
The technicians have warned that, until October 2020, legal entities had won 340 million in lottery prizes of more than 40,000 euros each, a figure that will increase after the El Niño draw and for which “they do not find any justification” .
For this reason, they have urged to modify the Corporation Tax Law so that the prizes that legal persons win are taxed at least the lottery tax to prevent companies and entities in losses or partially exempt from not being taxed and obtaining a refund of the withholding. 20%.
Gestha has recognized that the increase in the exempt minimum makes the bad practices of those who divert the collection of prizes to partially exempt foundations and entities or companies in losses attractive, but has insisted that to end fraud it is not necessary to increase exemptions and lower taxes, but combat avoidance through better research.