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A worker engaged in multiple economic activities enquired whether the refund of excess Social Security contributions is subject to Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that, as these contributions were previously treated as deductible expenses, their refund constitutes income from the activity.
This ruling clarifies the tax treatment for multi-activity workers, ensuring that refunds of previously deducted social security contributions are correctly accounted for as business income.
The tax team reviews your specific situation.
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