Skip to content
Back to index
V1335-19 10 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Compensation for professional negligence by a lawyer is taxed as a capital gain

A taxpayer inquired whether compensation received from their lawyer's insurer, due to the failure to recover redundancy pay, is tax-exempt. The Directorate General for Taxes (DGT) ruled that it is not exempt, as it constitutes compensation for financial loss rather than personal injury or redundancy pay itself.

The question raised

Possible consideration as exempt income of the amount corresponding to the unreceived compensation for unfair dismissal.

The DGT's ruling

The compensation derived from the lawyer's contractual civil liability constitutes a capital gain that must be included in the general taxable base. The exemption for personal injury under Article 7.d) does not apply because it concerns economic loss, nor does the exemption for dismissal under Article 7.e) apply because the concept is not that of dismissal or termination. Its quantification corresponds to the amount of the determined compensation.

Book your free first meeting