Availability allowance for special availability reservists is subject to Personal Income Tax

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the tax nature of the economic amounts received by military personnel holding the status of special availability reservists. The inquiry focused on determining whether said annual economic allowance enjoyed any type of exemption or whether, conversely, it should be included in the taxable base of Personal Income Tax (IRPF).

What the DGT has ruled

After analyzing the applicable regulations, the DGT has ruled that the availability allowance received by these reservists constitutes employment income, in accordance with the provisions of Article 17.1 of Law 35/2006 (LIRPF). The body clarifies that this amount is not covered by any legal exemption provided for in the current regulations.

Consequently, the allowance must be taxed in full under IRPF and is subject to the corresponding withholding system applied to employment income. For this analysis, the administration has referred to Law 35/2006, Law 39/2007 on the military career, and Law 8/2006 on Troops and Sailors.

What it means for you

If you are a military member who has become a special availability reservist and receives this annual economic allowance, you must take into account that this income is not an exempt concept. Unlike other allowances or compensations that may have favorable tax treatment, this allowance is added to your other employment income for the calculation of your taxable base.

This implies that:

• The amount received will increase your IRPF taxable base.
• The corresponding withholdings will be applied to said amount.
• It is not possible to apply tax exemptions to this specific concept.

What you should do

Since the nature of this income is clearly defined by the tax authority, it is necessary for the taxpayer to verify that the applied withholding is correct and that the income is properly reflected in their tax return. It is fundamental to assess each particular situation and ensure that the integration of this income into the taxable base is accurate to avoid possible contingencies with the Tax Administration.