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A taxpayer inquired whether compensation received for a fall in a commercial premises is exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that the exemption does not apply because the amount has not been determined by a court ruling or by law.
This ruling clarifies that for personal injury compensation to qualify for tax exemption, the specific amount must be formally established through legal or judicial means, preventing taxpayers from arbitrarily deciding exempt amounts.
The tax team reviews your specific situation.
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