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V1813-17 11 July 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Subsidies for health expenses not covered by the Health Service or Mutual Insurance are not taxable under Personal Income Tax

A query is made regarding whether a social action subsidy from a company to address an employee's disability is subject to Personal Income Tax. The DGT responds that if the subsidy is intended for health treatment or recovery and covers expenses not covered by the Health Service, it does not constitute income.

The question raised

Question posed: Tax treatment under Personal Income Tax of said subsidy.

The DGT's ruling

Financial subsidies for illness expenses not covered by the Health Service or Mutual Insurance, intended for health treatment or recovery, are not considered income. If the subsidy aims to alleviate the recipient's economic situation rather than providing healthcare assistance, it does constitute employment income. Therefore, if the health requirements are met, the subsidy is excluded from taxation and is not subject to withholdings.

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