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V3015-17 20 November 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · becas de investigación

Payments under an employment contract are not exempt as research grants

A researcher in training asks whether their income from a university contract is exempt under Article 7.j) of the Personal Income Tax Act (LIRPF). The Directorate General for Taxes (DGT) rules that, because an employment contract exists, the payments do not constitute grants and must be taxed as employment income.

The question raised

Whether the income received from the university is considered exempt from taxation through the application of article 7 j) of the Personal Income Tax Law.

The DGT's ruling

Amounts paid within the framework of an employment contract are not considered a scholarship. The nature of a scholarship is incompatible with the existence of an employment contract, which implies the provision of services under the organization and direction of the employer. Therefore, income derived from an employment contract must be taxed as employment income and is subject to withholding.

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