PRIZES won in the hugely popular Christmas Lottery, El Gordo have always been taxed once they break a certain threshold which until this year was €10,000.
The good news is that you don’t start paying tax on your winnings this year until they reach €20,000 and even if you win a really big prize then the first €20,000 is discounted for tax purposes.
So if you are lucky enough to win the biggest prize of €4 million for a full ticket, you will only pay €760,000 in tax rather than the €780,000 you would have paid last year.
It is estimated that the Treasury will collect €13.6 million less than last year but it will take a windfall of around €175million to help Spain with its overheads.
All of the large prizes are paid out with tax already deducted so there is no need to make any declaration when you present you tax returns unless of course you have invested the balance and received interest on your investment.
The other benefit for winners is that in the event that they need government financial assistance for scholarships for their children, disability allowance or any other form personal assistance then their winnings will not be taken into account as calculations are based in income rather than equity (except for value of property).
The Spanish love the Christmas draw and it is televised every year with youngsters singing out the numbers as they are drawn.