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V1906-20 12 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · estimación directa

Health insurance premiums are not deductible as business expenses if the company is the policyholder

A self-employed worker with multiple sources of income asks whether they can deduct health insurance premiums as a business expense when their company pays part of the premium and deducts the remainder from their salary. The Directorate General for Taxes (DGT) rules that these are not deductible because the company, rather than the taxpayer, is the policyholder.

The question raised

Whether the health insurance premiums paid by the consultant are a deductible expense in the determination of the net income from economic activities.

The DGT's ruling

For health insurance premiums to be deductible under the direct estimation method, the policyholder must be the taxpayer themselves who carries out the economic activity. If the policyholder is the company where the consultant works, the premiums are not considered a deductible expense in the determination of the net income from the economic activity. This is because, according to the Insurance Contract Law, the policyholder is the party obligated to pay the premium.

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