Skip to content
Back to index
V1195-20 4 May 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · responsabilidad civil

Judicially recognised compensation for non-pecuniary damages is exempt from Personal Income Tax (IRPF)

A query was raised regarding whether compensation for non-pecuniary (moral) damages owed by the Italian Ministry of Justice is exempt from Personal Income Tax (IRPF). The Directorate-General for Taxes (DGT) ruled that if the amount corresponds to personal injury and has been judicially recognised, the exemption applies.

The question raised

Whether the compensation received is exempt from taxation.

The DGT's ruling

Compensations for civil liability for personal damages (physical, psychological, or moral) are exempt if their amount is legally or judicially recognized. An amount is considered judicially recognized if it is fixed by a judge or court through a judicial resolution or through intermediate formulas involving judicial intervention, such as conciliation or settlement. In this case, as it is compensation for non-pecuniary damages recognized by a final judgment, its amount is exempt.

Book your free first meeting