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An individual received €9,000 in compensation for non-pecuniary damages following a liability settlement with a local council. The Directorate-General for Taxes (DGT) has ruled that this amount is not subject to Personal Income Tax (IRPF) as it constitutes compensation for personal injury.
This ruling clarifies the tax treatment of non-pecuniary damages, confirming that settlements for personal injury are exempt from income tax, providing legal certainty for taxpayers receiving such compensation.
The tax team reviews your specific situation.
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