Skip to content
Back to index
V1003-21 20 April 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · prestación por desempleo

Lump-sum unemployment benefits are tax-exempt if self-employment is maintained for five years

A query was raised regarding whether unemployment benefits received as a lump sum to pay self-employment contributions are exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that they are exempt, provided that the economic activity is maintained for a period of five years.

The question raised

Whether the unemployment benefit paid in a single lump sum is exempt from Personal Income Tax.

The DGT's ruling

Unemployment benefits paid in a single lump sum are exempt from Personal Income Tax (IRPF) provided they are allocated to the purposes set forth in Royal Decree 1044/1985. This exemption requires maintaining self-employed activity for five years from its commencement. Should this requirement be breached, for instance by retiring before the end of the term, the right to the exemption is lost and the situation must be regularized in the Personal Income Tax self-assessment for the period in which the breach occurs.

Book your free first meeting