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V1522-19 24 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rentas en especie

Cash subsistence allowance classified as monetary remuneration rather than benefit in kind

A query was raised regarding whether a subsistence allowance provided for in a collective agreement, which an employee may choose to receive in cash, constitutes a benefit in kind or monetary remuneration. The Directorate General for Tax (DGT) has determined that, by opting for cash payment, the amount is classified as monetary remuneration.

The question raised

Tax treatment of the subsistence salary supplement in kind which, at the employee's option, is paid in cash.

The DGT's ruling

If the employee opts to receive the subsistence allowance in cash, said concept is classified as monetary remuneration and not in kind. As it is monetary remuneration, the corresponding withholding tax on Personal Income Tax (IRPF) must be applied following the general procedure. The calculation of the withholding rate shall be carried out jointly with the rest of the employee's remuneration.

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