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V0368-24 12 March 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Reimbursement of travel expenses to governing body members may be subject to income tax

A dean of a professional association has enquired whether a travel allowance of €0.40/km is subject to personal income tax (IRPF) withholding. The Directorate General for Taxes (DGT) has ruled that if it cannot be proven that the amount strictly compensates for the expense, or if a flat rate is paid, it is considered employment income.

The question raised

Question posed: Whether the aforementioned compensation of 0.40 euros/km is subject to IRPF withholding in the portion that exceeds the 0.26 €/km established as the maximum exempt amount by Order HFP/793/2023 of July 12.

The DGT's ruling

Amounts to compensate travel for members of governing bodies are not considered per diems under the IRPF Regulations. If the association reimburses expenses without proving they strictly compensate for the travel, or pays a lump sum for free allocation, there is a monetary income subject to withholding. In such a case, it is classified as employment income under article 17.2.e) LIRPF and a withholding rate of 35 percent is applied.

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