Promosfera responds: prize-draws and -competitions in Spain

Useful information for organising prize-draws and -competitions in Spain

Today Rossella Adriatico, International Senior Project Manager of Promosfera, will help us clarify certain questions about prize-draws and -competitions in Spain.

How long does it take to activate a draw or competition?

The time required to activate a draw or competition in Spain varies depending on the type of mechanism and can range from 10 days for a competition based on skill to 3 weeks for a draw based on luck for which the regulations and a particular communication must be sent to the competent authorities (AEAT) before the start of the promotion to fulfill tax obligations correctly.

What are the tax obligations for a draw or competition promoter?

The tax obligations associated with the organisation of a draw or competition depend on various factors and, in particular, on the type of initiative and the value of the prizes.
For draws, based on luck as they are, for example, it is always mandatory to pay the “tasa de combinaciòn aleatoria”, a tax equal to 10% of the value of the entire prize pool that must be paid upon receipt of the relevant “carta de pago” by the AEAT, which must receive notification of the prize pool before the start of the draw. Regardless of the mechanism employed, “Ingreso a cuenta” taxes must be paid with the appropriate payment forms on prizes awarded with a value greater than 300 euros.

Are there any special procedures for awarding prizes and closing the draw or competition?

Although there is no compulsory procedure for closing the draw or competition, the procedures for awarding prizes are particularly delicate in Spain.
It is important to collect the documentation on the winners punctually and to keep track of the prizes awarded in order to meet requests from the competent authorities. When the circumstances arise, moreover, Spanish law provides that the award of the prize is accompanied by a meticulous collection of personal documents that must be delivered to the promoters for the correct fulfilment of tax obligations.

To learn more and to organise a prize-draw or -competition in Spain, contact us!