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V1924-17 19 July 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Accident insurance compensation for total permanent disability is exempt from Income Tax, subject to limits

A worker who suffered an occupational accident and was declared totally permanently disabled received compensation from a collective accident insurance policy. The query concerns whether this amount is exempt from Income Tax (IRPF).

The question raised

Whether the exemption under Article 7.d) of the LIRPF is applicable to the amount received from the insurance.

The DGT's ruling

Compensation for personal injury arising from accident insurance contracts is exempt pursuant to Article 7.d) of the Personal Income Tax Law (LIRPF). This exemption applies up to the amount resulting from the application of the damage assessment system set forth in the Law on Civil Liability and Insurance in the Circulation of Motor Vehicles.

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