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V0700-17 16 March 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Mutual aid benefits deemed employment income subject to IRPF and IRNR

A mutual insurance company queries the tax treatment of social assistance benefits granted for work-related accidents or illness. The DGT rules that these are deemed employment income and examines their taxation under IRPF and IRNR.

The question raised

In relation to said grants, the taxpayer raises the following questions:

The DGT's ruling

Social assistance grants are classified as employment income as they derive from an employment relationship due to accident or illness. For Personal Income Tax (IRPF), the 30% reduction may apply if they are imputed to a single tax period. For non-residents, they are taxed in Spain if the work was performed in Spanish territory, applying the general rate of 24% or 19% if they reside in the EU/EEA. It is not necessary to report these grants in Form 347 as they are already included in Form 190.

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