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V1910-17 18 July 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Childcare subsidies paid by a municipal body are subject to Personal Income Tax (IRPF)

A query is made as to whether childcare and education subsidies, established in a municipal collective bargaining agreement, are exempt from Personal Income Tax (IRPF). The DGT determines that these amounts are not exempt because they are granted to a specific group of employees.

The question raised

Whether said subsidy is subject to and not exempt from Personal Income Tax and, therefore, subject to withholding, or, conversely, whether it is considered exempt by application of Article 7 z) of the Tax Law.

The DGT's ruling

For family allowances from the Public Administration to be exempt under Article 7.z) of the LIRPF, the possibility of accessing them must be of a public scope. As these are subsidies granted by an entity to a specific group of employees, this requirement is not met. Therefore, the subsidy constitutes monetary employment income subject to IRPF and withholdings.

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