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V3039-19 29 October 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización

Civil liability compensation for personal injury is exempt if the amount is legally or judicially recognised

An individual received compensation for damages following medical negligence, determined through a settlement approved by a court order. The DGT clarifies whether such an amount is exempt from Personal Income Tax (IRPF).

The question raised

Taxation of the compensation.

The DGT's ruling

Compensations for civil liability for personal damages (physical, psychological, or moral) are exempt if their amount is legally or judicially recognized. An amount is considered judicially recognized if it is fixed by a judge or through intermediate formulas involving judicial intervention, such as a judicial settlement. Any amount exceeding the legally recognized amount shall be subject to taxation.

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