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V0614-20 ·31 March 2020 ·consulta-vinculante Medium impact
Tax

Compensation for financial loss due to professional negligence is taxed as a capital gain

A client received compensation following a settlement with lawyers for financial losses resulting from the mismanagement of a stock option. The Directorate General for Taxes (DGT) has ruled that this amount is not exempt and must be taxed as a capital gain.

In 6 key points

How it affects those involved

This ruling clarifies that compensation for economic damages, rather than purely moral damages, is subject to taxation as a capital gain under personal income tax regulations.

Lifecycle

2020-03-31PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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