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V1096-23 4 May 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · incapacidad temporal

Temporary disability benefits are treated as employment income, including contributions paid by the mutual insurance company

A self-employed individual on temporary disability has enquired about the tax treatment of RETA contributions paid by their collaborating mutual insurance company. The Directorate General for Taxes (DGT) has ruled that the benefit received constitutes employment income and includes the amount of said contributions.

The question raised

Question posed: Treatment in Personal Income Tax (IRPF) of the contributions paid by the corresponding Mutual Insurance Society.

The DGT's ruling

Social Security benefits for temporary disability are considered income from employment pursuant to Article 17.2.a)1 of Law 35/2006. Employment income includes the total amount of the benefit, which comprises the amount of the RETA contributions paid by the collaborating mutual insurance society. If the self-employed individual is taxed under the direct estimation method, this payment of contributions shall be a deductible expense for determining their net income.

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