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V0374-22 25 February 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · incapacidad temporal

RETA contributions paid by mutual insurance companies are treated as employment income and deductible expenses

A self-employed individual on temporary disability has enquired whether the payment of their social security contributions by a mutual insurance company affects their Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) has ruled that such amounts constitute employment income and, in turn, are deductible expenses.

The question raised

Impact on Personal Income Tax regarding the payment of self-employed contributions by the corresponding mutual insurance company during said period of temporary disability.

The DGT's ruling

Benefits for temporary disability are income from employment pursuant to Article 17.2.a)1 of Law 35/2006. The income includes the amount of RETA contributions paid by the collaborating mutual insurance company. If the self-employed individual applies the direct estimation method, this payment of contributions constitutes a deductible expense for determining net income.

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