The Treasury will keep more than one million euros from the new historic Pasapalabra jackpot
After nearly 23 years on the air, the legendary game show Pasapalabra has handed out the highest prize in its history. Rafael Castaño has won the coveted jackpot of 2,272,000 euros after months of intense battle against his partner and rival Orestes Barbero. Although the Sevillian will not be able to enjoy the prize in full, as this hefty sum is not tax exempt.
According to the tax experts of the tax platform TaxDown, prizes won on television are subject to a 19% withholding tax according to article 101.7, which is deducted directly by the television production company. Moreover, these prizes are not exempt from IRPF taxation, as they are considered a capital gain that does not derive from the transfer of assets and should therefore be included in the general taxable base.
In this regard, it should be remembered that personal income tax is a progressive tax, so different percentages will be applied depending on the brackets that correspond to each case. In this way, three aspects must be taken into account: the amount of the prize, the income and the autonomous community in which the taxpayer resides, as the latter will also vary the applicable rate.
In this case, Rafael, a resident of Seville, and the brand new winner of Pasapalabra has been a little less lucky than his rival. When Rafael files his IRPF next year, he will be reduced by 24.50% of the state scale on the one hand and 22.50% for the autonomous community on the other, i.e. 47% in total. As a result, the state tax agency would collect 546,090.75 euros from this prize and the Andalusian regional treasury some 506,610 euros.
In total, both bodies will keep 1,052,700.75 euros and Rafa would be left with a net prize of 1,219,299.25 euros, according to TaxDown experts. Meanwhile, if Orestes Barbero had won, being a resident of Burgos, this percentage would drop to 46% and he would have obtained a net prize of 1,242,419.72 euros, that is, he would have to pay about 20,000 euros less than his opponent.
In conclusion, Rafael and the rest of the TV contestants have to remember that the figure for which they are participating is gross and, as with the Christmas Lottery, the Treasury always wins. For all those lucky people who have won a prize of a higher or lower amount in 2021, they should remember to include it in their IRPF this year.