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V0382-21 25 February 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Health expense subsidies not covered by the Health Service are exempt from Personal Income Tax

A query was raised regarding whether social subsidies provided by a Ministry to its employees constitute employment income. The Directorate General for Taxes (DGT) has determined that subsidies for health expenses not covered by the Health Service or Mutual Insurance, intended for health restoration, do not constitute taxable income.

The question raised

Question posed: Tax treatment in Personal Income Tax of certain social aids that a Ministry provides to its employees.

The DGT's ruling

Financial aid for medical expenses not covered by the Health Service or Mutual Insurance, intended for treatment or the restoration of health, is not considered income. Any other social benefit aimed at alleviating the recipient's economic situation, even if due to illness, constitutes earned income. Aid for healthcare expenses already covered by the Health Service or Mutual Insurance is also subject to tax.

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