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V1418-17 6 June 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Accident insurance compensation for permanent disability is exempt from Income Tax (subject to limits)

A worker received €47,000 from an accident insurance policy under a collective agreement following absolute permanent disability. The query concerns whether this amount is exempt from Income Tax (IRPF).

The question raised

Whether the exemption provided in Article 7.d) of the Tax Law is applicable.

The DGT's ruling

The compensation derived from an accident insurance contract is exempt pursuant to Article 7.d) of the Personal Income Tax Law. This exemption applies up to the amount resulting from the application of the damage assessment system of the Law on Civil Liability and Insurance in the Circulation of Motor Vehicles.

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