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V0330-21 24 February 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Extraordinary benefit for cessation of self-employed activity taxed as employment income

A query was raised regarding whether the extraordinary benefit for cessation of activity under Royal Decree-Law 8/2020 constitutes employment income or income from economic activity, and its impact on Personal Income Tax (IRPF) in relation to self-employed social security contributions. The Directorate-General for Tax Administration (DGT) has determined that it is classified as employment income and that the lack of an obligation to make social security contributions does not affect the tax treatment.

The question raised

Whether the aforementioned benefit has the nature of income from employment or from economic activity, and its impact on the tax refund of contributions paid under the Special Regime for Self-Employed Workers or Freelancers during the period in which said benefit has been received.

The DGT's ruling

The extraordinary benefit for cessation of activity has the nature of income from employment, pursuant to Article 17.1 b) of Law 35/2006, as it is an unemployment benefit understood in a broad sense. Regarding RETA contributions, the exclusion from the obligation to contribute does not constitute a case of income acquisition nor a deductible expense, and therefore has no impact on Personal Income Tax (IRPF).

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