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V2933-17 15 November 2017 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · indemnización

Capital due to illness taxed as mobile capital income

A person enquired whether capital received due to total permanent disability from illness is exempt from income tax. The DGT responds that it is not exempt as it does not arise from an accident insurance policy and must be taxed as mobile capital income.

The question raised

Whether the capital received is exempt. Taxation in such case under Personal Income Tax. Legality of the withholding applied.

The DGT's ruling

The exemption for accident insurance does not apply if the disability results from an illness, as the definition of an accident is not met. The capital received is taxed as income from movable capital, calculated as the difference between the capital received and the premium paid. This income is included in the savings tax base and the insurer must apply a withholding tax of 19%.

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