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V0987-16 14 March 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Travel expense reimbursements for associated labour cooperative members may be taxed as employment income

An associated labour cooperative has enquired whether reimbursements for travel, subsistence, and accommodation expenses for its worker-members are exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) has ruled that the per diem regime under the Regulations applies only to employees under a contract of employment; therefore, for cooperative members, the tax treatment depends on how the expenses are managed.

The question raised

Application of Article 9 of the Personal Income Tax Regulation to said amounts, which declares exempt from taxation certain amounts intended by the company for locomotion, subsistence, and stay expenses of its employees, and their subjection to withholding.

The DGT's ruling

The regime of exempt per diems under Article 9 of the Tax Regulation applies only to those who have an employment relationship characterized by dependency and alterity. For members of cooperatives, there is no income if the entity directly provides the means (transportation, accommodation, or subsistence). If the cooperative reimburses expenses without proving they strictly compensate for travel, or pays amounts for free disposal, it is considered monetary income subject to withholding.

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