Spain tightens scrutiny of tax returns on gambling winnings 

Spanish consumers must declare profits from online gambling winnings in 2023 self-assessment income tax returns.

The directive comes from the Agencia Tributaria (AEAT), the Tax Agency of Spain’s Ministry of Finance, where Director General Soledad Fernández is increasing scrutiny on profits from online gambling, cryptocurrency transactions, property rentals, and foreign income.

Before the 2023 income tax filing period, AEAT issued approximately 2.9 million notices to taxpayers, ordering them to declare profits from these activities.

This includes the first-ever notices concerning online gambling profits. AEAT has sent out 164,000 warnings about these profits, marking the Treasury’s first targeted effort in this area.

However, Fernández and AEAT have expressed greater concern regarding undeclared cryptocurrency trading profits, issuing one million notices to individuals.

In relation to gambling winnings, in 2022 the Ministry of Finance authorised AEAT to update Tax Module-190 to ensure the reporting of gambling prizes/winnings under €300, impacting 2023 tax filings.

The tax requirement for winnings of €300 now applies to Spanish taxpayers earning over €22,000 annually, reduced from the previous €1000 disclosure threshold.

For sports betting and online gambling winnings (casino/poker), AEAT enforces a five-tiered tax framework with rates set at 19% on winnings up to €12,450, 24% from €12,450 to €20,200, 30% on €20,200 to €35,200, 37% on €35,200 to €60,000, and 45% for winnings over €60,000.

With these changes, AEAT has streamlined the process for amending or submitting specific declarations on gambling, crypto, and foreign income transactions, assuring that ‘taxpayers can easily modify amounts in their filings, and the system will automatically take care of the rest’.

The Ministry of Finance faced criticism from the Partido Popular (PP), Spain’s Conservative Party and primary opposition, for allowing AEAT to modify tax modules on gambling, deemed as an ‘unnecessary and punitive tax on recreational consumers’.