The DGT clarifies the taxation of advertising prizes in kind (IRPF)
Taxation of in-kind advertising prizes
Analysis of Binding Consultation V1178-25
The Directorate General of Taxes, in its binding consultation V1178-25 of July 1, 2025, has examined the tax treatment, in the Personal Income Tax, of prizes consisting of Netflix subscriptions and hotel stays obtained through a raffle in an advertising campaign.
The issue arises in the context of a private raffle, meaning one unrelated to any employment or professional relationship between the organizing entity and the participants. Based on this premise, the Spanish Directorate General of Taxes (DGT) classifies the prizes as capital gains, pursuant to Article 33.1 of the Personal Income Tax Law (LIRPF), which defines such gains as variations in the value of the taxpayer's assets resulting from any change in their composition, provided they do not constitute income expressly classified as such by law.
In this case, the DGT concludes that the prizes are not covered by any tax exemption or exclusion regime, and must therefore be included in the beneficiary's personal income tax base.
Obligation to withhold or pay on account
The DGT reminds that, according to article 75.2.c) of the Personal Income Tax Regulations (RIRPF), prizes obtained by participating in games, contests, raffles or random combinations are subject to withholding or payment on account, regardless of whether or not they are linked to the promotion or sale of goods or services.
However, Article 75.3.f) of the RIRPF itself introduces an exception: there will be no obligation to withhold when the prizes come from games organized in accordance with Royal Decree-Law 16/1977, of February 25, on games of chance, betting or gambling, or when the withholding base does not exceed 300 euros.
Determination of the advance payment
When the exclusion provided for does not apply, the organizing entity must make an advance payment on account, as the prizes are in kind. Pursuant to Article 105.1 of the Personal Income Tax Regulations (RIRPF), the payment will be calculated by applying the rate of 19.% provided for in Article 99.1 of the RIRPF to the value of the prize plus 20.% of the cost to the payer.
In short, the V1178-25 consultation reaffirms the tax obligation that falls on companies that promote advertising raffles in which prizes in kind are awarded, underlining the need to correctly determine both the nature of the income and the resulting withholding and advance payment obligations.