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V1697-24 10 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimiento de la actividad económica

Livestock sector aid under Royal Decree-Law 4/2023 is taxable as income from economic activity

A query was raised regarding whether direct aid to the livestock sector, intended to compensate for rising costs and loss of income, is exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that such aid must be taxed as income from economic activity.

The question raised

Whether such grants are exempt from Personal Income Tax (IRPF).

The DGT's ruling

Grants awarded to compensate for losses and increased production costs are considered income from economic activity by virtue of their origin. Their temporal allocation is governed by accounting regulations, and they must be recognized as income in the fiscal year in which the expenses being financed are accrued or in which the minimum profitability is ensured.

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