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V2238-22 25 October 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención

Municipal maternity or adoption grants are exempt from income tax withholding

A local council enquired whether financial grants aimed at encouraging childbirth (vouchers or cheques for specific expenses) were subject to personal income tax (IRPF) withholding. The Directorate General for Taxes (DGT) ruled that these public benefits for birth, childbirth, or adoption are exempt.

The question raised

Whether these grants are subject to Personal Income Tax (IRPF) withholding and, if applicable, what the applicable withholding percentage would be.

The DGT's ruling

The grants awarded by the City Council, linked to birth or adoption, are considered public benefits for these situations. Therefore, the exemption provided for in Article 7.h) of the Personal Income Tax Law (LIRPF) is applicable. Consequently, these grants are not subject to withholding tax for Personal Income Tax (IRPF).

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