The Magic of the Christmas Lottery: How Prize Winnings Are Taxed in Andorra, Spain or France

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🎄 The joy of Christmas and its tax reality

Christmas is just around the corner, and with it the dream many people share: winning a lottery prize and turning the holidays into something unforgettable. But the excitement of the “Gordo” also comes with tax implications.

If you are a resident in Andorra and receive a prize from a Spanish lottery, or if you are a Spanish resident lucky enough to win the Christmas Lottery, it is essential to know how your winnings are taxed.
Below, we explain everything you need so the tax authorities do not catch you by surprise this holiday season.

🏔️ I. Residents in Andorra

🇪🇸 Spanish lottery prizes

Andorra, with its competitive tax system, treats foreign income in the same general way as domestic income. However, in the case of lottery prizes, there are specific rules that are important to understand, related to Spain’s treatment of non-residents and to the Double Taxation Convention (DTC) in force between the two countries.

• Withholding at source (Spain)

When the prize is collected, Spain applies a 20% withholding on the amount that exceeds the exempt minimum. In 2024, this threshold is €40,000, which means you only pay tax on the portion above that amount.

Example: a prize of €100,000 will be subject to withholding only on the €60,000 exceeding the minimum, applying a 20% rate to that amount (€12,000 withheld).

• The DTC and Article 20:

The Double Taxation Convention between Andorra and Spain does not include a specific article for lottery winnings. Therefore, these prizes fall under Article 20 (income not expressly mentioned), which establishes that they must be taxed exclusively in the tax residence country of the beneficiary.
If the beneficiary is a tax resident in Andorra, the tax liability corresponds entirely to Andorra.

If you want to learn more about the signed DTC, you can read The Double Taxation Convention between Andorra and Spain: basis of the current fiscal relationship

💶 Effective taxation in Andorra

Based on the above, the prizes should be taxed exclusively in Andorra. Under local legislation, this taxation would theoretically reach 10%, bearing in mind the €3,000 general exemption, applicable to all savings income.

However, there is a key point:

There is a specific exemption for lottery prizes authorised under Andorra’s gambling law, as well as for gambling income from entities that have a signed agreement with the Andorran Gaming Regulator.

This expressly includes lottery prizes organised by SELAE.

Therefore:
lotteries originating in Andorra or Spain are fully exempt in Andorra.

🇫🇷 French lottery prizes

Unlike Spain —which applies withholding at source—, France does not withhold any tax on lottery prizes and does not require the income to be declared.

In Andorra, however:

• this income is subject to IRPF
• a 10% rate would apply to the amount won
• the €3,000 general exemption would apply
• this is due to the absence of a convention with the French organising entities

If you want to understand how IRPF works in Andorra, you can read Personal Income Tax (IRPF) in Andorra

🇪🇸 II. Residents in Spain

🎫 Spanish lottery prizes

For residents in Spain, luck also has its fiscal consequences. Prizes are taxed as follows:

• Partial exemption:
  The first €40,000 of any prize organised by SELAE, ONCE or the Red Cross is exempt, just as for non-residents.
• 20% withholding:
  On the amount exceeding €40,000, the organiser will automatically apply a 20% withholding at the time of payment.

📑 Do I need to declare it in the IRPF?

If the prize was subject to withholding: you do not need to file any additional declaration.

If you received a prize with no withholding, you must declare it using form 136 (quarterly), instead of including it in the PIT annual return.

🏢 What if the winner is a company?

In this case, the prize must be added to the taxable base, and the withholding applied will count as a tax credit.
Therefore, there is an obligation to declare it in the Corporate Income Tax return.

If you want to understand this tax in more detail, you can read Corporate Tax in Andorra: rates, special regimes and tax deductions

🌍 III. Prizes for non-residents in Spain

If you do not reside in Spain but win a lottery prize organised by SELAE, the same rule applies:

• Tax for non-residents:
  A 20% withholding applies to the portion exceeding €40,000. This tax is final and no additional declaration is required.
• Double Taxation Conventions:
  If you live in a country with a DTC, you may request a refund of the tax paid in Spain.
  This is the case for Andorran residents.
• Recovery of withheld amounts:
  For non-residents, including residents in Andorra, the procedure requires filing a refund request for undue payments. An official tax residence certificate is essential to justify the application of the DTC and the right to be taxed exclusively in the residence country.

If you want to see all the DTCs currently in force in Andorra, you can read Double Taxation Conventions (DTCs) in Andorra

🎁 IV. Taxation of the Grand Loto de Noël in France

🇫🇷 Residents in France

Grand Loto de Noël prizes are exempt.
Winners receive the full amount without any tax deduction.

🏔️ Residents in Andorra

For Andorran residents who win the Grand Loto de Noël:

• the prize is considered income subject to Andorran IRPF
• a 10% rate applies
• the €3,000 general exemption applies

It is important to remember that, although France does not withhold tax, declaring the income in Andorra is mandatory.

Conclusion: a fiscally responsible dream

The lottery brings joy and excitement during Christmas, but we must not forget that luck also comes with tax obligations.

Whether you are a resident in Andorra, Spain or elsewhere, understanding how lottery prizes are taxed is essential to fully enjoy the experience.

And if fortune smiles upon you, remember that we are here to help you with any tax questions you may have. You can contact us through our form, or book a meeting if you would like personalised and confidential guidance using the link available at the bottom of this article.

At ELYSIUM Consulting, we wish you a festive season full of luck and prosperity. Merry Christmas, a happy New Year, and the best of luck!

Last updated: December 2025