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A taxpayer inquired whether compensation claimed from a lawyer for failing to recover a redundancy payment is exempt income. The Directorate General for Taxes (DGT) ruled that it is not exempt, as it constitutes a loss of assets rather than personal injury.
This ruling clarifies that compensation for financial losses resulting from professional negligence is subject to Personal Income Tax (IRPF), as it does not qualify for the exemptions reserved for personal injury.
The tax team reviews your specific situation.
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