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V3132-20 20 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención de cotizaciones

Exemption from RETA contributions due to COVID-19 measures is neither income nor a deductible expense for Personal Income Tax

A query was raised regarding whether the exemption from RETA (Self-Employed Regime) contributions resulting from COVID-19 regulations should be taxed as income or deducted as an expense. The Directorate General for Taxes (DGT) ruled that it has no impact on Personal Income Tax (IRPF) as it does not constitute the receipt of income.

The question raised

Whether the exemption from RETA contributions in said scenarios must be considered income for Personal Income Tax purposes and whether the amount of the exempt contributions must also be considered a deductible expense.

The DGT's ruling

The exemption from RETA contributions, configured as an absence of obligation or an exemption, has no impact on Personal Income Tax (IRPF). As it does not correspond to any of the scenarios for obtaining income under Article 6 of the Personal Income Tax Law (LIRPF), it is neither of the nature of gross income nor of a deductible expense.

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