Taxation of winnings (El Salvador)

1) Basic principles: who pays and when they hold

Source of income. Gambling winnings (casinos/halls, bingo, lotteries, betting) are treated as taxable income.

Source hold. For prizes paid by an offline operator (hall, lottery, bingo), a withholding mechanism is usually in effect.

Independent reporting. If the deduction was not applied (for example, the international online platform paid the prize without deduction), the obligation to declare falls on the winner (player).

Resident vs non-resident. For residents of El Salvador and non-residents, the regime may differ: rates, base, offset procedure and supporting documents.

2) Which winning formats are more common

1. Lotteries and raffles. Prizes in cash or in kind (cars, equipment).

2. Bingo. Ticket/participation cash payments.

3. Casinos/halls. Cash, cheque or bank transfer payments; individual and jackpots.

4. Sports betting. Prematch/live, express, fantasy prizes.

5. Online prizes from international sites. Payments in fiat, e-wallet or stablecoins/cryptocurrency.

3) Operator and cash desk role (offline)

Identification of the winner. For prizes over "micro-payments" the cash desk checks the document (ID/passport), fixes the amount, date, place and payment channel.

Check and withholding. The issued cheque/receipt shall reflect: gross amount of winnings, amount of tax withheld (if applicable), net amount payable, operator's details.

Natural prizes. When issuing a car/equipment, the operator draws up the cash equivalent of the prize and the procedure for paying tax (withholding/self-payment).

4) Residency and "foreign winnings"

Resident of El Salvador: declares world income according to local rules, with the possibility of offsetting tax withheld abroad (if applicable and confirmed by documents).

Non-resident: A separate withholding mechanism may apply for Salvadoran source winnings, after which there is usually no additional liability in the source country (but check your country's tax residence rules).

Double taxation: if there are international agreements, the tax paid can be offset; original checks/retention certificates will be required.

5) Online payments and cross-border nuances

International sites. Often do not withhold tax at source in El Salvador; responsibility for declaration is transferred to the player.

Payout method. When transferring to e-wallet or in stablecoins/ECN, fix the rate, network, commission, date and amount in USD-equivalent (for the correct base).

KYC and transaction traces. Keep profile screenshots, transaction history, T&C draw - this confirms the origin of the income.

6) Documents to keep

Operator's receipts/cheques explaining deductions.

Protocol/act of winning (for lotteries/bingo/tournaments) or jackpot form.

Bank statements/e-wallet with crediting.

Crypto transactions: txid, network, memo/tag, conversion rate at the time of receipt.

Correspondence with support (identity confirmation, amount approval).

7) Frequent situations and how to act

Small winnings on the spot. Collect the check, check the deductions line; with zero retention - assess the need for a subsequent declaration.

Large jackpot in the hall. Prepare ID, accept withholding at source (if appropriate), ask for a withholding certificate; specify the terms and format of additional payments (if part of the tax is paid by you).

Winning from abroad. Collect a maximum of documents: extract, site license screen, drawing rules, confirmation of the withheld (if any). When submitting a local declaration, attach confirmations for the offset.

Natural prize. Specify the monetary value of the prize and who, when and how the tax is paid; get it in writing.

8) Typical player errors

Lack of supporting documents (checks, statements, screenshots).

Ignore "online income" under the pretext that "the site is foreign."

Incorrect accounting of crypto payments (no course/date/txid → disputed base).

Confusion with residency (taxes are paid where you are a resident, plus deductions are possible in the source country).

9) Typical operator errors

Incomplete check (no gross amount and no deduction line).

Incorrect identification of the winner in a large payout.

Delay in provision of retention certificate.

Lack of an understandable showcase of tax and payment rules for guests.

10) Player checklist (short version)

1. Always take a check/receipt with hold details.

2. Keep statements (bank/e-wallet), screenshots of the lobby/result.

3. For crypto payments, fix txid, network, course and date.

4. Clarify your residency status and declaration rules.

5. If in doubt, consult your local tax advisor.

11) Checklist to operator

At the checkout - a tax memo (es/en), an example of a completed check.

For large winnings - KYC procedure, retention certificate template, payout log.

For lotteries/bingo - circulation protocols, prize sheets, public rules.

For online promo - transparent T&C: who pays the prize, currency, terms, documents.

12) Responsible play and transparency

Publish payment rules, deadlines and documents; do not promise "net amounts" without reservation.

Help guests understand that the tax is not equal to the hall commission.

Maintain bilingual communication in tourist areas (es/en).

13) FAQ (short)

Will taxes be withheld immediately in the hall/lottery?

Often yes - through withholding at the source. Check the check: gross amount, deduction, amount to be paid.

If the site is international and did not hold anything?

A self-declaration would probably be required; Save all confirmations.

How to take into account crypto payments?

Fix txid, network, rate in USD at the time of receipt; keep history in wallet/exchange.

Do I need documents with "small" amounts?

Yes I did. Even with small amounts, keep the check - the rule of good accounting hygiene.

---

Taxation of winnings in El Salvador is based on a combination of withholding at the source (offline) and independent reporting (often with foreign online payments). The key to peace of mind is documents (checks, statements, withholding certificates), correct recording of amounts/dates/courses and understanding of your residency status. Operators need a transparent showcase of rules and KYC discipline, players need accurate documentation and, if necessary, consultation with a specialist. So both sides reduce risks and avoid unpleasant surprises.