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A taxpayer inquired whether their Civil Service pension, increased following a worsening of their illness, is subject to Income Tax. The Directorate General for Taxes (DGT) ruled that the pension is exempt provided the injury or illness renders the recipient completely unable to perform any profession or trade.
This ruling clarifies the tax-exempt status of increased Civil Service pensions for individuals whose health deterioration leads to total incapacity.
The tax team reviews your specific situation.
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