Running promotions in Spain
Giving away prizes, or running a promotional activation in Spain is a great idea but there are a few issues to watch out for. Amy Powell, Compliance Manager, at PromoVeritas points out the most important ones:
- Games of skill are lawful in Spain – however you must ensure that winners are picked ONLY on the basis of skill, with zero element of chance featuring as part of the selection process.
- Games of chance are lawful, both purchase related and not, however there are some requirements that apply to both:
- it is recommended, but not a legal requirement, to file promotional Terms and Conditions with a Public Notary and for them to then carry out the draw. If a Public Notary is used there will be costs associated with this.
- Games of chance require registration with the relevant Tax Authority which can take time.
- The promoter is required to pay 10% of the value of the prizes to the Tax Authority.
- There are different registration processes if the promotion is run as an on-the-ground activation or experiential campaign.
- You must build in enough time to complete and review the Terms and Conditions and also to prepare, file, pay all tax and related forms. PromoVeritas suggest allowing three weeks from the point of having a final set of T&Cs.
- Spanish winners must pay tax income tax on prizes valued over certain amounts.
As always, there are penalties for non-compliance that brands need to be aware of, with fines ranging from €100,000 to €1,000,000 and even higher depending on the circumstances of the case. Of course, brands must follow GDPR requirements as any infringement of these could result in fines of 4% of the global turnover of the offending company.