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V4868-16 11 November 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · responsabilidad civil

Compensation for professional malpractice is taxed as a capital gain for Personal Income Tax

A client receives €12,000 from an insurer as compensation for a lawyer's malpractice during a dismissal process. The DGT has ruled that this amount is not an exempt compensation for personal injury, but rather a capital gain.

The question raised

Treatment in the Personal Income Tax (IRPF) of the compensation.

The DGT's ruling

Compensation for pecuniary damages derived from contractual civil liability is not exempt as it does not constitute personal injury. Since it is neither an exemption nor a non-subject matter, the amount must be included in the general taxable base as a capital gain. Its quantification corresponds to the amount of compensation determined in the judgment.

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