Back to index
V2021-18 5 July 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

FPU grants received via employment contracts are not exempt from Income Tax

A recipient of FPU grants inquired whether these amounts were exempt from taxation as research scholarships. The Directorate General for Taxes (DGT) ruled that, because an employment contract was formalised to receive the aid, the amounts do not qualify as scholarships and must be taxed as employment income.

The question raised

Subject to withholding of the income received as such aid, or whether the same are exempt from taxation through the application of Article 7 j) of the Personal Income Tax Law.

The DGT's ruling

Amounts paid within the framework of an employment contract are not considered scholarships. As an employment contract exists between the researcher and the host center, the income is not covered by the exemption under Article 7.j) of the Personal Income Tax Law (LIRPF). Therefore, they must be taxed as employment income and are subject to withholding.

Book your free first meeting