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V3009-20 6 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Prepaid incentive cards that are not electronic money are treated as benefits in kind

A taxpayer queried whether incentive cards (one nominative and one with limited use) constitute cash remuneration or benefits in kind. The DGT ruled that, as they do not qualify as electronic money, they are considered employment income in kind.

The question raised

Whether the delivery of the referred cards as incentives or prizes is considered monetary or in-kind employment income. Likewise, the subjection to withholding or payment on account of said remuneration.

The DGT's ruling

If the cards do not meet the definition of electronic money under Law 21/2011, the incentives must be considered benefits in kind. Card B is not electronic money due to its limited use to the issuing entity. Regarding Card A, if the holder cannot request a refund of the monetary value, it is also not considered electronic money. These benefits in kind are subject to withholding according to the general procedure of the Personal Income Tax Regulations.

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