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V0221-14 30 January 2014 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IRPF · gravamen especial

Lottery prizes with shared ownership do not constitute income for the mediating entity

A religious entity has requested clarification on whether it must apply a 20% withholding tax on National Lottery prizes purchased and distributed among individuals. The Directorate General for Taxes (DGT) ruled that, due to the shared ownership structure, the prize belongs to the participants, and the entity acts solely as a payment intermediary.

The question raised

It is raised, in the event that the consulting entity purchases winning Lottery tickets, whether the 20% withholding established in section 3 of Law 16/2012 must be applied when the prizes are paid and, if applicable, who should apply it.

The DGT's ruling

National Lottery prizes are subject to the special tax of the Personal Income Tax Law (LIRPF), but as they are held jointly, each co-holder obtains the portion corresponding to their share. The entity that collects the prize for distribution performs a simple payment mediation, and therefore must not withhold tax from the beneficiaries. The 20% withholding on the portion exceeding 2,500 euros must be applied by the payer of the prize, in this case, the State Society of Lotteries and State Betting.

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