El Niño Lottery: Tax-Free Winnings Up To €40,000

After the big Christmas Lottery draw on December 22nd, the El Niño Lottery offers another chance to win. This draw takes place every year on January 6th, which is Epiphany (Three Kings' Day). But many players wonder how much of their winnings they'll have to pay in tax.

For this year's draw, Spain's State Lotteries printed 55 series, each with 100,000 tickets. A full ticket costs 200 euros, but most people buy 'tenths' (décimos) for 20 euros each. In total, 1.1 billion euros worth of tickets were sold. From this, 70% – or 770 million euros – is allocated to prizes.

Just like the Christmas Lottery and other draws run by State Lotteries, El Niño prizes are subject to tax. Under Law 16/2012, the tax agency applies a 20% withholding tax on any prize that is more than 40,000 euros.

However, prizes of 40,000 euros or less are completely tax-free. This means the El Niño third prize, which pays 25,000 euros per tenth, is collected in full. All other smaller prizes are also paid out without any tax deduction.

If you share a lottery 'tenth' with others, it's wise to keep a record to prevent any disagreements later. The easiest way is to photocopy the ticket and write down everyone involved and their share of the prize. It's also a good idea to include each player's ID number.

For prizes under 2,000 euros, one person can collect the winnings at a lottery office and then distribute the money. But if the prize is more than 2,000 euros, it must be collected through a bank. In this case, the bank will need to know all the winners and their percentage of the prize. The bank will then deposit the full amount into the account of the main ticket holder, who is responsible for distributing it to the others as agreed.