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V1058-22 11 May 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Subsidies for healthcare costs not covered by public health services may be exempt from Personal Income Tax

A query was raised regarding whether company financial aid intended to offset healthcare expenses (such as implants, eyewear, or psychological support) is subject to Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that such payments will not be taxed, provided they are used for treatment or the restoration of health and are not covered by the National Health Service or mutual insurance.

The question raised

Tax treatment in the Personal Income Tax of said aid.

The DGT's ruling

Financial aid for medical expenses not covered by the Health Service or Mutual Insurance intended for treatment or the restoration of health shall not be considered income subject to Tax. If the benefit is intended to alleviate the recipient's economic situation and not to provide healthcare for the recovery of health, it shall constitute earned income subject to taxation. Likewise, aid for medical expenses that are covered by the Health Service or Mutual Insurance shall also be taxable.

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