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V1450-17 7 June 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Geographical mobility tax reduction not applicable if relocation results from accepting a scholarship

A taxpayer inquired whether they are entitled to a tax reduction for geographical mobility after relocating to undertake a paid scholarship registered with Social Security. The Directorate General of Taxes (DGT) ruled that, as a scholarship does not constitute an employment contract, the requirements for this deduction are not met.

The question raised

Whether, due to the relocation to Zaragoza to begin a paid scholarship on March 1, 2016, the taxpayer is entitled to the reduction for geographic mobility.

The DGT's ruling

The additional reduction of 2,000 euros for change of residence only applies to unemployed taxpayers registered with the employment office who accept a job position. Scholarships, although they constitute earned income, are grants that are not considered salary or consideration, which makes them incompatible with the existence of an employment contract. Therefore, if the relocation is a consequence of accepting a scholarship, the deduction is not applicable.

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