Skip to content
Back to index
V0864-22 21 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Personal injury civil liability compensation calculated under traffic law is exempt from Income Tax

A taxpayer has inquired whether compensation offered by an insurer following a pedestrian accident (covering personal injury, loss of earnings, and expenses) is exempt from Income Tax (IRPF). The Directorate General for Traffic (DGT) clarifies that if these amounts are calculated according to the criteria set out in the Annex to the Law on Civil Liability and Insurance in the Circulation of Motor Vehicles, they are exempt.

The question raised

Question raised: Taxation in the Personal Income Tax (IRPF).

The DGT's ruling

Compensation for civil liability for personal injury is exempt from Personal Income Tax (IRPF) if received in the amount legally or judicially recognized. If the concepts of basic personal harm, funeral expenses, and loss of earnings are calculated following the criteria and amounts of Title IV and the Annex of the consolidated text of the Law on Civil Liability and Insurance in the Circulation of Motor Vehicles, the exemption applies. This includes motivated offers from insurers that comply with the requirements of said law.

Email
Contact