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A worker on leave of absence has requested clarification on whether company reimbursement for the costs of their special Social Security agreement is subject to Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) has ruled that these amounts constitute employment income and are subject to tax withholding.
This ruling clarifies that any reimbursement by an employer for social security contributions related to a special agreement is treated as taxable income for the employee, rather than a non-taxable expense reimbursement.
The tax team reviews your specific situation.
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