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A taxpayer received a partial permanent disability indemnity subject to Income Tax (IRPF) withholdings, but was subsequently recognised as having a total disability, requiring the return of the initial benefit. The Directorate General for Taxes (DGT) clarifies whether it is possible to recover the withholdings applied to that undue benefit.
This ruling clarifies the procedure for recovering tax withholdings when a benefit is returned due to a change in disability status, ensuring taxpayers can reclaim taxes paid on amounts that were ultimately not due.
The tax team reviews your specific situation.
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