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V3122-16 5 July 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · renta mundial

Dutch disability pension may be exempt from Spanish tax if conditions met

A Spanish resident with Dutch nationality asks whether a long-term disability pension from a Dutch private company is exempt from Spanish personal income tax. The DGT states that, under the double taxation treaty, the pension is taxed only in Spain, but exemption depends on proving that the degree of disability and the paying entity meet specific criteria.

The question raised

Whether said pension is exempt from taxation in Spain under the Personal Income Tax.

The DGT's ruling

For a foreign disability pension to be exempt under Article 7.f) of the Personal Income Tax Law (LIRPF), two requirements must be met: the degree of incapacity must be equivalent to absolute incapacity or severe disability, and the paying entity must be a substitute for the Social Security in its country. These requirements must be proven to the Tax Administration through means of evidence admitted under Law.

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