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V2333-17 14 September 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancias y pérdidas patrimoniales

Compensation for damages is integrated as a capital gain in the general tax base

An individual received compensation from a company for damages arising from a breach in its legal representation. The DGT determines that this income constitutes a capital gain that must be taxed in the general tax base.

The question raised

Taxation of compensation under Personal Income Tax.

The DGT's ruling

The receipt of compensation implies an alteration in the composition of assets that generates a capital gain pursuant to Article 33.1 of the Personal Income Tax Law (LIRPF). As it does not derive from a transfer of assets, the amount is quantified by the total received without reductions. This gain must be integrated into the general tax base as it is general income.

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