2025 Christmas Lottery Overview: Prizes and Fiscal Projections
According to information released by the Spanish State Lotteries and Betting agency (Loterías y Apuestas del Estado), the annual Extraordinary Christmas Lottery Draw (Sorteo Extraordinario de la Lotería de Navidad) will be held on December 22, 2025. This year’s total prize pool is expected to reach €2.702 billion, continuing Spain’s most traditional annual event. Due to an increase in the number of lottery series issued, the Union of Technicians of the Ministry of Finance (Gestha) predicts that the 2025 Christmas Lottery will generate approximately €180 million in tax revenue for the state, an increase of about €4.55 million compared to 2024.
Current Tax Regulations for Lottery Winnings
Since January 1, 2020, Spain’s tax policy on lottery prizes stipulates a tax-free allowance of €40,000. For amounts exceeding this threshold, the tax authority applies a flat 20% tax. This regulation primarily affects winners of the first (‘El Gordo’), second, and third prizes. For other prizes, as the winnings are below the tax-free limit, winners receive the full amount without any tax deductions.
Net Winnings for Major Prizes
Based on the 20% tax rate, the specific taxes to be paid on major prizes are as follows:
- First Prize (‘El Gordo’): A tax of €72,000 must be paid on each winning ticket.
- Second Prize: A tax of €17,000 must be paid on each winning ticket.
- Third Prize: A tax of €2,000 must be paid on each winning ticket.
For tickets purchased by a group, prize distribution and tax declarations should be handled with care to avoid potential tax disputes.
Tax Authority’s Special Warning on “Tax Refund Insurance”
Regarding “tax refund insurance” products appearing on the market, Gestha has issued an important warning. These insurance policies claim to reimburse winners for the amount of tax withheld from their prize. However, the union points out that this insurance payout is not tax-free. According to Spanish tax law, this compensation must be declared in the following year’s Personal Income Tax (IRPF) return as a “capital gain” and is subject to progressive tax rates. Therefore, purchasing such insurance does not completely eliminate the tax burden, and players should fully understand the tax implications before buying.
