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V2372-19 11 September 2019 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · indemnizaciones

Disability payouts from group insurance via pension commitments are taxed as employment income

A worker inquired whether disability compensation received following a work accident was exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that they are not exempt because the insurance is not an accident policy, but rather a vehicle for pension commitments.

The question raised

Whether the indemnities received are exempt from IRPF.

The DGT's ruling

The indemnities are not exempt under Article 7.d) of the LIRPF because the contract is not an accident insurance policy, as it also covers death or illness. By establishing pension commitments, disability benefits qualify as employment income pursuant to Article 17.2.a) 5.ª of the LIRPF.

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