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V0253-18 5 February 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · dietas

Allowances over nine months treated as income from work and interest as patrimonial gains

A worker asks whether amounts for maintenance expenses and legal interest from a court ruling are subject to withholding. The DGT states that allowances lose their exemption after nine months of displacement and interest is considered non-withholding patrimonial gains.

The question raised

Whether the amounts received are subject to withholding tax.

The DGT's ruling

Allowances for subsistence and accommodation lose their status as exempt income and are taxed as employment income if the displacement within the same municipality exceeds nine continuous months. Legal interest with an indemnification nature is taxed as capital gains, is not subject to withholding, and is imputed to the period in which it is recognized. Per diems generated over a period exceeding two years allow for the application of a 30 percent reduction.

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