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V3034-19 29 October 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Compensation for financial loss due to professional negligence is taxed as a capital gain

A taxpayer inquired whether compensation received for economic damages caused by a negligent tax advisor is exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that it does not qualify as an exemption for personal injury, but rather as a capital gain.

The question raised

Taxation of compensation in the Personal Income Tax (IRPF).

The DGT's ruling

Compensation for contractual civil liability arising from professional negligence does not constitute an exemption for personal injury. As it concerns economic loss or patrimonial damage, it must be classified as a capital gain. This is integrated into the general taxable base and its quantification corresponds to the amount of the compensation.

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