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V1223-25 4 July 2025 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Income from a permanent disability insurance claim may be exempt from income tax

A worker asks whether compensation from a collective accident insurance policy, following an accident en route, is exempt from income tax. The DGT responds that the compensation may be exempt if the legal requirements are met and the damage valuation limit is not exceeded.

The question raised

Application of the exemption under Article 7.d) of Law 35/2006 to the compensation.

The DGT's ruling

Compensation for personal injury derived from accident insurance contracts is exempt pursuant to Article 7.d) of Law 35/2006. This exemption applies provided that the premiums could not reduce the taxable base or be treated as a deductible expense. The exempt amount shall be that resulting from the application of the damage assessment system set forth in the Law on Civil Liability and Insurance in the Circulation of Motor Vehicles. Any excess over said amount shall be subject to Personal Income Tax (IRPF).

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