Skip to content
Back to index
V0905-25 26 May 2025 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rentas exentas

Damages morale exempt in IRPF, but lost profits taxed as work income

A person receives a judicial indemnity for violation of their trade union freedom, including lost profits and moral damages. The DGT rules that only the moral damages portion is tax-exempt.

The question raised

Taxation under Personal Income Tax (IRPF).

The DGT's ruling

Compensations for civil liability for personal damages (physical, psychological, or moral) with a judicially recognized amount are exempt income. Loss of earnings is not considered personal damage, but rather material damage due to economic loss, and therefore must be taxed as income from employment.

Book your free first meeting