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V1574-22 30 June 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos de actividades económicas

Grants for specific expenses are recognised in the tax year in which the expenses are incurred

A taxpayer has enquired as to when a grant received to cover economic activity expenses should be declared. The DGT has ruled that, as the grants are intended for specific expenses, they must be recognised as income in the same tax year in which the expenses they finance are incurred.

The question raised

Timing of recognition of the grant for Personal Income Tax purposes.

The DGT's ruling

Grants for specific expenses must be recognized as income in the same fiscal year in which the expenses being financed are accrued. To determine the timing of recognition, accounting regulations are applied, which distinguish between the recognition of the grant and its allocation to results. Once recognized as non-repayable, the allocation depends on its purpose.

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