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V5264-16 13 December 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · prestación por orfandad

Orphanhood benefits from social welfare mutual funds are not exempt from Income Tax

A query was raised regarding whether orphanhood benefits received from a social welfare mutual fund are exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that they are not exempt, as regulations only grant exemptions to Social Security benefits or equivalent schemes, whereas the mutual fund's statutes specify that its benefits are complementary and independent.

The question raised

Whether said benefit is exempt by virtue of Article 7.h) of Law 35/2006.

The DGT's ruling

The orphan benefit provided by the mutual society is not included in the exemption under Article 7.h) of Law 35/2006. As these are benefits of a complementary, independent, and non-concurrent nature with the mandatory Social Security schemes, they are not considered exempt income and are subject to tax.

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