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V0708-22 1 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · responsabilidad civil

Court-awarded personal injury compensation in France may be exempt from Personal Income Tax

A query was raised regarding whether compensation for physical, psychological, and moral damages awarded by a French court is exempt from Personal Income Tax (IRPF). The Directorate General of Taxes (DGT) indicates that the exemption applies if the amount corresponds to personal injury and complies with legal standards or judicial recognition.

The question raised

Whether compensation obtained from a French court for physical, psychological, and moral damages could be considered exempt for Personal Income Tax (IRPF) purposes.

The DGT's ruling

Compensations for civil liability for personal damages (physical, psychological, or moral) are exempt in the amount legally or judicially recognized. A judicially recognized amount is understood to be that which is fixed by a judge or through intermediate formulas with judicial intervention, such as conciliation or settlement. If the compensation is extrajudicial, the excess over the legal amount shall be subject to tax.

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