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V2996-21 1 December 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos de actividades económicas

Grants for first-time farmers are taxed as income from economic activities

A query was raised regarding the taxation of grants for the first-time establishment of young farmers. The Directorate General for Taxes (DGT) ruled that these grants are considered income from economic activities, and their timing for tax purposes depends on their purpose and the chosen imputation method.

The question raised

Taxation of the aforementioned aid.

The DGT's ruling

The aid is classified as income from economic activities pursuant to Article 27.1 of the Personal Income Tax Law (LIRPF). Its temporal allocation will depend on whether it is an operating subsidy (income for the fiscal year) or a capital subsidy (allocation according to depreciation). In this specific case, as it is not intended for specific investments, it must be allocated in the period in which the grant is formally awarded, unless the cash basis of accounting is chosen.

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