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V3152-17 5 December 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retribución en especie

Company-paid health insurance premiums may be exempt if agreed as benefits in kind

A query was raised regarding whether health insurance premiums paid by a company for an employee and their family constitute exempt benefits in kind. The Directorate General for Taxes (DGT) ruled that it depends on whether the payment is a reimbursement of expenses or an agreed benefit in kind.

The question raised

Application of Article 42.3:c) of Law 35/2006 to the payment by the company (within a flexible remuneration plan) of the premiums for a medical insurance corresponding to the worker, their spouse, and two children (one over 25 years of age and another under that age). The amount of the premiums is 480.00€ for each of them, so their total amount is 1,920.00€, not exceeding 30% of the total gross remuneration.

The DGT's ruling

If the company pays the insurance by mandate of the employee (payment mediation), it is considered monetary remuneration. If the benefit in kind is agreed upon in the contract or collective agreement, health insurance premiums are exempt up to 500 euros annually per person (or 1,500 if they have a disability).

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