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V0524-20 4 March 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Medical expense allowances not covered by Social Security may be exempt from Income Tax

A civil servant inquired whether allowances to cover physiotherapy, dental, or optical expenses are subject to Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that they are not taxable, provided they are intended for health restoration and are not covered by the Health Service or mutual insurance.

The question raised

Tax treatment in the Personal Income Tax of said grants.

The DGT's ruling

Grants for medical expenses not covered by the Health Service or Mutual Insurance, intended for treatment or the restoration of health, are not considered income subject to Tax. Any other social benefit intended to alleviate the economic situation of the recipient constitutes income from employment. Likewise, grants for healthcare expenses that are covered by the Health Service or Mutual Insurance are also taxable.

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