The Spanish government has issued a clarification regarding the taxation of online gambling profits with the finance ministry iterating that online gambling losses cannot be set off against income tax.
Losses accrued through online gambling do not result in tax credits that can be deducted from income tax and can only be used to lower capital gains derived from online gambling activities.
The law, which was published in the Official State Gazette on December 28, 2012, allows gambling losses to be discounted from winnings in the same taxable period, effectively reducing the net capital gain.
The ministry also reiterated that lottery and betting winnings in excess of €2,500 are subject to a 20 per cent tax rate, effective from January 1, 2013.
