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V3134-21 17 December 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retribución en especie

Company-paid health insurance is not exempt for a worker's domestic partner

A query was raised regarding whether company-paid health insurance for an employee and their domestic partner is exempt from Personal Income Tax (IRPF). The Directorate General of Taxes (DGT) ruled that the exemption does not extend to domestic partners and that the nature of the payment (benefit-in-kind or cash) depends on whether it is agreed upon as remuneration or is a simple reimbursement.

The question raised

Application of the provisions of Article 42.3.c) of Law 35/2006, in the case of an employee who contracts their medical insurance and that of their domestic partner through the company where they work.

The DGT's ruling

The exemption for health insurance premiums under Article 42.3.c) of the IRPF Law does not apply to domestic partners, as the law prohibits analogy to extend tax benefits beyond what is strictly written. If the company pays the insurance as an agreed-upon benefit in kind, the exemption limits for the worker, spouse, and descendants apply. If the company only reimburses the expense to the worker, it is considered monetary income subject to withholding.

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