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V0881-21 14 April 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención de becas

Income tax refunds for foreign study scholarships may be requested following official recognition

A taxpayer inquired how to prevent the statute of limitations from expiring on tax refunds for a foreign study scholarship while awaiting the official recognition of their studies. The Directorate General for Taxes (DGT) ruled that the scholarship is taxed as employment income until recognition or equivalence is granted, at which point the right to a refund arises.

The question raised

Question posed: Assuming that, once the recognition or validation of university studies completed abroad is obtained, the scholarship amount would be exempt from taxation in accordance with the first paragraph of Article 7 j) of the Personal Income Tax Law, for the purposes of requesting a refund of the amounts as undue payments, the taxpayer seeks to know (due to the several years of study duration and the fact that the recognition period could reach one and a half years) what means or procedures are available to avoid the statute of limitations and the denial of the refund of undue payments for the amounts paid to the Tax Administration.

The DGT's ruling

Scholarships for formal studies abroad are exempt if the degree is subject to official recognition or validation. Until such recognition or validation occurs, the amounts received are taxed as income from employment. The four-year statute of limitations for requesting the refund of undue payments shall begin to run from the day following the date on which the corresponding recognition or validation is obtained, as prior to that moment, the payment is not considered undue.

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