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V1424-17 ·6 June 2017 ·consulta-vinculante Medium impact
Tax

Compensation for damages resulting from breach of job offer is taxable as employment income

A taxpayer received compensation for damages following a company's failure to honour a job offer. The Directorate General for Taxes (DGT) has ruled that this amount must be taxed under Personal Income Tax (IRPF) as gross employment income.

In 5 key points

How it affects those involved

This ruling clarifies that compensation for loss of opportunity or breach of contract regarding employment is not exempt from tax, but is treated as standard employment income.

Lifecycle

2017-06-06PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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