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V2545-24 11 December 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · incapacidad temporal

Temporary disability benefits are considered earned income, including contributions paid by the mutual insurance company

A query was raised regarding whether RETA (Self-Employed Regime) contributions paid by a mutual insurance company during a period of temporary disability should be included in the benefit base. The Directorate-General for Taxes (DGT) ruled that the benefit constitutes earned income and includes the amount of said contributions.

The question raised

Tax treatment in Personal Income Tax (IRPF) of the contributions paid by the corresponding Mutual Insurance Company.

The DGT's ruling

Social Security benefits for temporary disability constitute income from employment pursuant to Article 17.2.a)1 of Law 35/2006. Employment income includes the total amount of the benefit received, which encompasses the amount of RETA contributions paid by the collaborating mutual insurance company. If the self-employed individual is taxed under the direct estimation method, this payment of contributions shall be a deductible expense in their economic activity.

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