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V3169-15 20 October 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retribución en especie

Salary deduction for medical insurance not considered species remuneration

A university inquired whether the cost of a medical insurance policy assumed by an employee through salary deduction constitutes species remuneration exempt from taxation. The DGT responds that it is not species remuneration, but rather a payment mediation using the employee's direct cash remuneration.

The question raised

Question posed: Whether the scenario presented is considered covered by the provisions of article 42.2.f) of Law 35/2006.

The DGT's ruling

When the employee allocates part of their monetary remuneration to acquire a service and the company acts as a payment intermediary, there is no benefit in kind. In this case, the cost of the insurance is borne by the worker as it is deducted from their salary, therefore the exemption under article 42.2.f) (current 42.3.c) of the Personal Income Tax Law does not apply. For it to constitute a benefit in kind, the supply would have to be agreed upon as an obligation of the company in the contract or collective agreement.

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