Brussels, 6 July 2007
According to the Spanish rules, income earned in Spain in the form of rewards or winnings from competitions, games or gambling is subject to taxation. However, an exemption applies on lottery winnings from lotteries and gaming organised by the state lottery, the gaming agency (ONLAE) and agencies of the autonomous communities as well as on the income from draws organised by the Spanish Red Cross and the Spanish National Association of the Blind.
Spain argues that the exemption is not discriminatory as it is based on the nature of the organisers and not on the place of their establishment. However, the Commission considers that the exemption provided in the Spanish legislation constitutes a discrimination prohibited by the EC Treaty, as the favourable treatment is not open to other EU entities of the same nature than those mentioned for the exemption purposes.
The Commission agrees that the Member States have discretion in deciding on how to avoid the damaging consequences that can derive from gambling but only to the extent that it does not involve any discrimination based on nationality.
The Commission had sent a Reasoned Opinion to Spain on 15 December 2006 to request it to change its legislation. Spain's reply was negative.
The Commission's cases reference number is 2005/2431.
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