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V3268-23 19 December 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Medical expense subsidies not covered by public healthcare are exempt from Income Tax if used for health recovery

A local council has requested clarification on whether financial subsidies for medical expenses not covered by the public health system are subject to Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) has ruled that they are not taxable, provided they are used for medical treatment or the restoration of health.

The question raised

Tax treatment in Personal Income Tax of said grants.

The DGT's ruling

Grants for medical expenses not covered by the Health Service or Mutual Insurance intended for the treatment or restoration of health are not considered income subject to Personal Income Tax (IRPF). However, any other social benefit intended to alleviate the recipient's economic situation or grants for expenses already covered by public healthcare do constitute earned income. This exclusion applies regardless of whether the grant is for the illness of the worker or for their children or partners.

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