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V1560-24 26 June 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Scholarships for competitive exam preparation are taxable as employment income

A taxpayer inquired whether a scholarship from the Ministry of Justice, intended for preparing selective examinations and subsequently returned, was subject to tax. The Directorate General of Taxes (DGT) ruled that the scholarship is not exempt and must be taxed as employment income; however, since it was returned before the 2023 tax return was filed, it should not be included in that settlement.

The question raised

Must the individual be taxed on said scholarship in their Personal Income Tax return for the 2023 tax period?

The DGT's ruling

Scholarships to cover the costs of preparation for competitive examinations are not covered by the exemption under Article 7.j) of the Personal Income Tax Law (LIRPF), and therefore are taxed as income from employment. However, the refund of an amount unduly received does not affect the tax year in which it is made, but rather the tax year in which it was declared. If the refund is made before filing the tax return for the corresponding period, said amount must not be included in the tax settlement.

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