Prize draws on social media
Nowadays, one of the best ways of promoting yourself on the internet is to hold prize draws on the social media. It must be made clear, however, that apart from the regulations of each social network regarding prize draws these are also governed by the Spanish Gambling Law 13/2011 of 27 May in terms of their tax regime. You can consult the law here.
There are two points to consider when holding a prize draw on social media:
Legal terms and conditions of prize draws on social media
Any prize draw on social media must include legal terms and conditions that are available to users at all times and include the following information:
- Identification of the organiser.
- Start date and end date.
- Mechanics of the prize draw.
- Participation requirements.
- Personal data and image protection.
- Value, nature of the prize and selection of the winner.
- Responsibility of the organisation.
- Applicable law and jurisdiction.
Furthermore, remember that you must pay Gambling Tax, which accounts for 10% of the value of the prize given. Payment is made using form 685 (tax on bets and random combinations, self-assessment).
However, if the prize exceeds €300, the withholding must be applied through personal income tax and it must be clearly stated in the legal terms and conditions of the prize draw whether this withholding is to be made by the individual / company holding the prize draw or by the winner of the draw.
Where payment by any means is required from the participant in order to take part in the prize draw, remember that all prize draw regulations will apply. In this case, prior authorisation must be requested from the relevant Authorities. Finally, bear in mind that the Authorities have one month to grant authorisation and, if it is not granted within this period, it is considered refused.
We hope all this information is of use, and should you require advice on organising your prize draw on any social network please do not hesitate to contact us.
Mariona Heredia, Lawyer