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V1326-15 29 April 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · renta exenta

French absolute disability pension may be exempt from Spanish IRPF

The consultant asks whether their French absolute disability pension is exempt from Spanish IRPF. The DGT states that, although worldwide income is taxed in Spain under the France-Spain treaty, the pension will be exempt if it can be proven that the degree of incapacity is equivalent to absolute or severe disability and that the French entity replaces the Spanish Social Security.

The question raised

Whether the pension received from France constitutes income exempt from taxation in Spain under the Personal Income Tax.

The DGT's ruling

For the disability pension received abroad to be exempt pursuant to Article 7.f) of the Personal Income Tax Law (LIRPF), two requirements must be met: that the recognized degree of incapacity is equivalent to absolute incapacity or severe disability, and that the paying entity is a substitute for the Social Security under French regulations. These requirements must be proven before the Tax Administration. The DGT does not issue rulings on the equivalence of degrees between different Social Security regimes.

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