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V1346-19 10 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Birth grants paid by a local council to its officials are not exempt from Income Tax

A local council has enquired whether birth grants paid to its officials under a collective bargaining agreement are exempt from tax. The Directorate General for Taxes (DGT) has ruled that they are not exempt because they do not constitute public benefits.

The question raised

Whether said grant could be considered exempt under the provisions of the last paragraph of article 7.h) of the Personal Income Tax Law, which establishes the exemption of public benefits for birth.

The DGT's ruling

For birth benefits or grants to be exempt, they must be received from a Public Administration and their access must be of a public scope. As the grant is established by the city council for a specific group (its civil servants) through a working conditions agreement, it does not meet the requirement of public scope. Therefore, the grant is monetary income from employment subject to Personal Income Tax (IRPF).

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