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V0146-18 26 January 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Court-ordered compensation for violation of fundamental rights is exempt from Personal Income Tax

A taxpayer received court-ordered damages due to the violation of their fundamental rights within their company. The Directorate General of Taxes (DGT) has determined that this amount is not subject to Personal Income Tax (IRPF).

The question raised

Subject to taxation of the aforementioned compensation by the Personal Income Tax.

The DGT's ruling

Compensations for civil liability for personal injury, in the amount legally or judicially recognized, are exempt pursuant to Article 7.d) of the Personal Income Tax Law. As it is compensation for non-pecuniary damages arising from the violation of fundamental rights recognized in judicial proceedings, it is covered by said exemption.

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