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V2928-21 19 November 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Court-awarded compensation for non-pecuniary damages is exempt from Personal Income Tax (IRPF)

A taxpayer inquired whether a €6,251.00 compensation payment received for non-pecuniary damages following a court ruling is subject to tax. The Directorate General for Taxes (DGT) ruled that such an amount is not subject to taxation.

The question raised

Taxation of the compensation in Personal Income Tax (IRPF).

The DGT's ruling

Compensations for civil liability for personal damages, whether physical, psychological, or moral, are exempt from Personal Income Tax (IRPF) provided that their amount is legally or judicially recognized. In this case, as it is compensation for the violation of the right to privacy established by a court ruling, the exemption under Article 7.d) of Law 35/2006 applies.

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