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A self-employed individual requested clarification on the taxation of a subsidy intended to fund their Social Security contributions. The Directorate General of Taxes (DGT) ruled that these amounts constitute income from economic activities and must be recognised according to either the accrual basis or the cash basis.
This ruling clarifies the tax treatment of specific subsidies for the self-employed, confirming they are treated as business income rather than other types of income, which affects how they are reported and timed for tax purposes.
The tax team reviews your specific situation.
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