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A foundation sought clarification on whether an award for the best academic record in Education was exempt from or subject to tax withholding. The Directorate General for Taxes (DGT) ruled that it is neither a scholarship nor an exempt prize, but rather constitutes employment income.
This ruling clarifies that academic awards granted for merit, which do not meet the specific criteria for scholarships, must be treated as taxable employment income, requiring the appropriate tax withholdings.
The tax team reviews your specific situation.
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