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V0649-17 14 March 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retribución en especie

Nursery fee payments are exempt benefits in kind if stipulated in a contract or collective agreement

A query was raised regarding whether company-paid nursery fees for children under three constitute an exempt benefit in kind. The DGT ruled that such payments are exempt if the company is contractually or collectively obliged to provide them; however, they are treated as taxable cash income if the company merely acts as a payment intermediary or provides a reimbursement.

The question raised

Application of the provisions of Article 42.3.b) of Law 35/2006.

The DGT's ruling

For nursery services to constitute an exempt benefit in kind pursuant to Article 42.3.b) of Law 35/2006, they must be stipulated in the collective bargaining agreement or the employment contract. If the company only acts as a payment intermediary or reimburses expenses contracted by the employee, it is considered monetary remuneration subject to Personal Income Tax (IRPF). It is not exempt if there is no contractual obligation for the company to provide said service.

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