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V0604-24 9 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · hecho imponible

Receiving third-party funds to cover expenses does not constitute income for Personal Income Tax (IRPF) purposes

An administrator of a padel group asks whether receiving money from players into their personal account to pay for courts and balls has tax implications. The Directorate General for Taxes (DGT) responds that receiving funds to settle expenses on behalf of third parties does not constitute income, although the taxpayer must be able to prove the origin of those funds.

The question raised

Limits on income received in a personal account from players without this entailing actions by the Tax Administration.

The DGT's ruling

The receipt of money from a third party to incur expenses on their behalf does not, in principle, have significance for Personal Income Tax (IRPF), as the taxable event requires the acquisition of income. However, the DGT cannot establish the monetary limits used by inspection bodies in their actions. The taxpayer must be able to prove the origin of the money received from third parties.

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