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V3383-20 19 November 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · responsabilidad patrimonial

Compensation for personal injury under State liability is exempt from Income Tax

A taxpayer received €20,000 following an out-of-court settlement with SERMAS due to his mother's death. The DGT has ruled that this amount is not subject to Income Tax (IRPF), as it constitutes compensation for personal injury within the scope of State liability.

The question raised

Taxation of the compensation under Personal Income Tax.

The DGT's ruling

Compensations paid by Public Administrations for personal injury resulting from the operation of public services are exempt. The change in liability regulations (from Royal Decree 429/1993 to Laws 39/2015 and 40/2015) does not alter the scope of the exemption. In this case, compensation for personal injury (which includes physical, psychological, and moral damages) is covered by Article 7.q) of the Personal Income Tax Law.

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