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V1708-17 3 July 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · incapacidad permanente absoluta

Income tax rectification possible to recover withholdings following retroactive recognition of absolute incapacity

A taxpayer inquired about recovering Social Security withholdings from 2016 after obtaining a ruling recognising absolute permanent incapacity with retroactive effect. The Directorate General of Taxes (DGT) responded that such income is exempt and that the taxpayer may request a rectification of their personal income tax (IRPF) return.

The question raised

In relation to the withholdings applied by Social Security throughout 2016, the question arises as to how to recover said withholdings considering the recognition of their absolute permanent disability with retroactive effect, having already filed the 2016 Personal Income Tax return.

The DGT's ruling

Social Security benefits for absolute permanent disability or severe invalidity are exempt from Personal Income Tax (IRPF). The judicial recognition of absolute disability with retroactive effect ensures that both the income received as a total pension and the income from the new situation are exempt. To recover the withholdings applied, the taxpayer may request the rectification of their Personal Income Tax self-assessment through the procedure regulated in the General Tax Law and its Regulations.

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