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V2936-17 15 November 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · exención

Physiotherapy services for employees may be VAT exempt and not subject to Income Tax if healthcare requirements are met

A company has requested a ruling regarding the VAT and Income Tax treatment of physiotherapy services contracted for its employees. The DGT has determined that these services are exempt from VAT if they constitute healthcare and do not constitute taxable income for Income Tax purposes if provided to cover health expenses not covered by Social Security.

The question raised

VAT liability of therapeutic physiotherapy massages provided to the applicant's personnel.

The DGT's ruling

Physiotherapy services are exempt from VAT when they constitute medical, surgical, or health assistance (diagnosis, prevention, or treatment) provided by healthcare professionals. If these requirements are not met, they are subject to the 21% rate. For Personal Income Tax (IRPF) purposes, these services do not constitute benefits in kind if they are considered assistance for illness-related expenses not covered by the Health Service or Mutual Insurance intended for the restoration of health. Otherwise, they constitute employment income.

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