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V1098-19 21 May 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Death compensation for common illness established by collective agreement is not exempt from Income Tax

A query was raised regarding whether the compensation received by the heirs of a construction sector worker following death from a common illness is exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that it does not constitute exempt income.

The question raised

It is asked whether the compensation received is exempt from Personal Income Tax.

The DGT's ruling

The compensation established in the collective bargaining agreement for death resulting from a common illness or non-occupational accident, received from an insurance company, is not covered by the exemption provided in Article 7.d) of the Personal Income Tax Law. It does not constitute compensation for civil liability nor an accident insurance contract. There is no other legal provision that allows this income to be considered exempt.

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