collecting

Statistically, the probability of touching you The Christmas Jackpot is 0.001%. However, has touched you and, suddenly, everyone has a plan for your money. The joy is real, but so are the doubts. How much money really reaches your account, what silly mistakes can turn into a prize in a problem and, above all, what you should do with that money to avoid the “lottery effect” and in five years you will be left without money and with more debt than you have now. No joke, many lottery winners they have ended up ruined. To avoid any scares, we have consulted with Aitor Fernández, head of the tax area of TaxDownto tell us how to avoid surprises with the lottery. A prize clean of dust and straw. In the case of the Christmas Lottery, the key tax rule is the “special tax” that the Treasury applies, in which the first 40,000 euros are exempt from taxation, and a 20% withholding is applied to the rest. “You do not receive the 400,000 euros of the first prize, but you directly receive 328,000 euros because the bank already applies the withholding on account of taxes,” says Aitor Fernández. “Only those prizes lower than 40,000 euros, which is the exemption limit.” “The positive part is that you don’t have to do anything to the Treasury, you will receive the net amount.” Of the 400,000 euros, the first 40,000 are exempt, so 20% is applied to the remaining 360,000 euros. This implies a withholding of about 72,000 euros in taxes. Therefore, the bank will give you a total amount of 328,000 euros when collecting the first prize. The calculation is the same for second and third prizes. The fourth and fifth prizes are tax free because its amount is less than the 40,000 euros established by the Treasury. The tenth is shared, not the taxes. A custom almost as deep-rooted as the Christmas Lottery is share the tenths with co-workers, friends or family. However, when it comes to collecting it, a decisive factor must be taken into account: who collects the prize. The temptation is for the person who has the ticket to go to the nearest bank to deposit their tenth and then distribute it among the rest of the group. This is the biggest mistake. As the tax expert highlights, “if a single person collects and then distributes, the Treasury can interpret it as a donation, so it is advisable to record the participants and percentages from the moment of collection.” In this way, the bank itself distributes the prize and withholds its share of taxes from each participant. Otherwise, the Treasury could demand from the person who collects it the payment of Inheritance and Donation Tax, especially taxable when it comes to donations when there is no relationship. Is it awarded? I buy it from you. From Gestha warn to the winners of the main Christmas Jackpot prizes that people may appear interested in buying the winning tenth for an amount greater than the prize itself. It looks like a double stroke of luckbut in reality it is the prelude to possible problems for the winner, both with the Treasury and with Justice. This is a fraud that involves an unjustified increase in assets (when you win the lottery there is evidence of its origin), so it is no longer governed by the same “special tax” of lottery prizes, but rather by the maximum of the autonomous community of residence. Furthermore, he would incur a crime of money launderingwhich would also have problems with the law for it. As Fernández highlights, “it is neither free money nor fiscally innocuous.”​ A very distributed Gordo…in Finland. There are more and more Spanish workers who They emigrate to other countries to workeither tourists coming to Spain and participate in the Lottery tradition with friends or family from Spain. How are these prizes taxed for non-residents? The AEAT classifies lottery prizes for non-residents by linking them to the same special tax that applies to residents. That is to say, in principle, nothing changes and from the outset the same withholding is applied as to any resident. However, Aitor lands it “when you are going to collect, this person has to identify himself and the tax is 20 percent. The impact is the same. Where it gets complicated is later, since here the double taxation agreements and there we will have to see in each country”, because the country of residence can require to declare income or request a refund of what was paid in Spain, and even adjust the taxation by requesting a refund of part of the amount paid in Spain and pay tax on a percentage in the country of residence. Tips to avoid going bankrupt: use common sense. According to a study of the Universitat Oberta de Catalunya, only 49% of the adult population has financial knowledge, so finding yourself overnight with more than 320,000 euros in your current account “can lead to making illogical and irrational decisions regarding businesses or very expensive purchases,” says Mireia Cabero, professor of Psychology and Educational Sciences Studies at the UOC. In this scenario, the TaxDown expert recommends using common sense and, above all, forget about the rush. “We no longer have to pay taxes again for the prize we have received for having it in the bank. Without doing anything, that money will not be taxed again, unless we already have a lot of assets and we have to declare the Wealth Tax. Normally winning the lottery is not going to get you into the Wealth Tax”, so he recommends letting that money “rest” until you have a plan of what to do with it. In addition to staying calm, Fernández recommends “let a few days pass, get advice, learn a little about the investment options that exist, see what to do with this money and what investments we are comfortable with and always reserve something so as not to put all our eggs … Read more