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V3029-16 29 June 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Travel expense reimbursements for associated work cooperative members may be taxable if not strictly proven as expense compensation

An associated work cooperative has enquired whether reimbursements for travel, subsistence, and accommodation expenses for its worker-members are exempt from Personal Income Tax (IRPF) under the per diem regime. The Directorate General for Taxes (DGT) has ruled that the per diem regime in the Regulations applies only to employees under a contract of employment. Consequently, for cooperative members, it must be verified whether the reimbursement constitutes actual expense compensation or is instead a form of remuneration.

The question raised

Application of Article 9 of the Personal Income Tax Regulation to said amounts, which declares exempt from taxation certain amounts allocated by the company for the locomotion, subsistence, and stay expenses of its employees, and their subjection to withholding.

The DGT's ruling

The per diem regime under Article 9 of the Tax Regulation applies only to those who receive income from employment through an employment relationship characterized by dependency and alterity. For members of cooperatives, no income arises if the entity provides the necessary means for their functions (transportation, accommodation, etc.). If the cooperative reimburses expenses without proving they strictly compensate for travel, or pays amounts for free disposal, it is considered monetary income subject to withholding.

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