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V1239-20 4 May 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · mínimo por descendientes

Minimum allowance for descendants cannot be applied if child's income is from economic activities

A taxpayer inquired whether their child's income from organising a job fair could be classified as employment income to qualify for the personal allowance for descendants in Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that, as the fair was organised by a student committee, the income must be classified as income from economic activities.

The question raised

Question posed: Question regarding the appropriateness of classifying the income received as derived from employment, for the purpose of allowing the applicant to apply the minimum per descendant in their Personal Income Tax (IRPF) return.

The DGT's ruling

For income to be classified as earnings from employment, the organization of the activity must be carried out by a third party and not by the taxpayer themselves through the management of production means or human resources. In this case, as the fair is organized by a student committee, it is understood that there is self-directed management of means, qualifying it as income from economic activities. This prevents the application of the minimum per descendant if the child files a tax return for income exceeding 1,800 euros.

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