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V0163-19 25 January 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rentas en especie

Payment of directors' and officers' liability insurance premiums does not constitute benefits in kind

A query was raised regarding whether the premium for a directors' and officers' liability insurance policy for a foundation constitutes a benefit in kind. The Directorate General for Taxes (DGT) ruled that, under the described conditions, it does not constitute a benefit in kind subject to Personal Income Tax (IRPF).

The question raised

It is inquired whether the premium paid under the aforementioned civil liability insurance constitutes remuneration in kind.

The DGT's ruling

Considering that the policy covers involuntary acts or omissions in the performance of duties and that the premium is paid in a lump sum without individual attribution, it is not considered remuneration in kind pursuant to Article 42 of the Personal Income Tax Law (LIRPF). The insurance covers the insured and other parties, such as spouses or heirs, for events derived from the administrator or executive.

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