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A query was raised regarding the classification and timing of tax reporting for compensation received from the compulsory expropriation of rural land. The Directorate General for Taxes (DGT) has determined that such compensation constitutes a capital gain and must be attributed to the tax period in which the occupation occurs.
This ruling clarifies the tax treatment for individuals receiving compensation for expropriated property, ensuring that the capital gain is taxed in the year the property is actually occupied rather than when the payment is received.
The tax team reviews your specific situation.
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