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V3338-20 11 November 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Health subsidies not covered by the Health Service or Mutual Insurance are exempt from Personal Income Tax (IRPF)

A query was raised regarding whether financial aid provided by a City Council to cover employees' health expenses is subject to Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that such aid is not taxable, provided it is intended for health restoration and is not covered by the National Health Service or Mutual Insurance.

The question raised

Tax treatment under Personal Income Tax regarding grants for health treatment provided by a City Council to its workers.

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). Any other social benefit intended to alleviate the recipient's economic situation constitutes earned income. Likewise, grants for medical expenses that are already covered by the Health Service or Mutual Insurance are taxable.

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