It could be said that for the Extraordinary Christmas Draw of this 2020, the Treasury will not have the same luck as in previous years. With the increase in the exempt minimum, from 20,000 to 40,000 euros, to declare the awards, the union of technicians of the Ministry of Finance, Gestha, estimates that the State will stop raising about 20 million euros.
In percentage terms, they will stop receiving 11.9% less than in 2019, and it will not be due to the economic impact derived from the coronavirus crisis, but due to the increase in the exempt minimum that was approved on January 1 of this year, and which goes to 40,000 euros. The prizes that this modification will affect remain the same: The 'Gordo', the Second Prize and the Third Prize.
In this context, Gestha warns that 20% of the amount obtained from 40,000 euros will be taxed, corresponding to the three biggest prizes of the Christmas Giveaway.
Thus, for the First Prize, which distributes 400,000 to the tenth, the winners will win 328,000 euros, 4,000 euros more than last year, while the treasury will keep the remaining 72,000 euros. For the Second, they will deliver 17,000 euros to the Treasury, keeping 108,000, and those who have been awarded the Third will only have to deposit 2,000 euros in the state coffers, and they will take 48,000.
FOUNDATIONS AND ASSOCIATIONS MULTIPLIED THEIR AWARDS
The finance technicians warn of a trend that has been taking place. And it is that foundations, associations and non-profit organizations multiplied by eight the Lottery prizes, mainly the Christmas one, reaching the 427.7 million euros in 2019.
Despite the fact that the number of prizes subject to lottery tax decreased by almost half, by 42% due to the increase in the exempt minimum in 2019 from 10,000 to 20,000 euros, in the previous year 294 million more euros were distributed in large prizes, of which these associations entered 374.8 million more, assuming an unprecedented increase of 700%, also taking over another 85 million families who did not win.
In this regard, Gestha has been warning about this practice that had exploded for three years, and demands that the Corporation Tax law be modified so that the prizes that legal persons win pay at least the Lottery tax to avoid that partially exempt companies and entities do not pay taxes and obtain a refund of the 20% withholding.
The technicians have also been claiming for several years to the State Tax Administration Agency (AEAT) that they be allowed to open a research to certain associations and entities that accumulate 99.5% of the prizes obtained by legal entities.
And finally, by 2021, "suspicious awards" can be investigated when the tax fraud prevention law comes into force. This, according to Gestha, would allow the AEAT to know the winners, the amount won, the dates of the draw and the payment of the prize, among other things, Immediately".
For all this, they ask the Government to restore the minimum exempt in the Lottery, ONCE and Red Cross prizes to 2,500 euros, since they consider that this "would discourage gambling". In addition, they estimate that there is no reason why a random gain of 40,000 euros should not be taxed, and instead the Minimum Vital Income (IMV) of 1,000 euros must be declared.
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