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V1820-19 15 July 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Compensation for financial loss due to lawyer negligence is taxed as a capital gain

A taxpayer received €32,650.30 in damages following negligence by her lawyer. The DGT has ruled that this amount is not exempt and must be taxed under Personal Income Tax (IRPF).

The question raised

Impact on the settlement of Personal Income Tax (IRPF) of said compensation.

The DGT's ruling

Compensation for pecuniary damages arising from contractual civil liability does not constitute an exemption for personal injury or dismissal. As it is not covered by other exemption scenarios, it is classified as a capital gain that must be included in the general taxable base. Its quantification corresponds to the amount of compensation established in the judicial ruling.

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