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A query was raised regarding the taxation of compensation for material and non-material damage. The DGT ruled that only personal injury (physical, psychological, or moral) may be exempt, provided the amount is legally or judicially recognised.
This ruling clarifies that compensation for property or material damage does not qualify for tax exemption and must be declared as a capital gain, whereas personal injury compensation may be exempt under specific legal conditions.
The tax team reviews your specific situation.
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