Beneficiaries of death gratuities may apply the 30% reduction

The tax treatment of amounts paid by a company to the relatives of a deceased employee has been analyzed by the Tax Administration. The ruling addresses the nature of these benefits and the possibilities for tax optimization for those who receive them.

What the DGT has ruled

The Dirección General de Tributos (DGT) has determined that economic benefits provided by a company to beneficiaries (such as widows or children) following the death of an employee are classified as employment income under Personal Income Tax (IRPF).

Furthermore, the ruling establishes that these amounts may benefit from the 30% reduction provided for in Article 18.2 of the IRPF Law. For this reduction to be applicable, it is a necessary condition that said benefits are imputed in a single tax period.

Regarding the company's perspective, the ruling points out that if the gratuity is granted as a mere liberality, it will not be deductible for Corporate Tax, in accordance with Article 15.e of the Corporate Tax Law.

What it means for you

If you are a beneficiary of a gratuity due to the death of a relative who worked at a company, you should know that this amount will be taxed as if it were a salary or employment income. It is not considered investment income or a gift, which determines the applicable tax rate.

However, the possibility of applying the 30% reduction represents a significant advantage in the final tax burden, provided that the requirement of imputation in a single fiscal year is met.

What should be done

It is necessary to verify the nature of the amount received and ensure that the imputation in the IRPF is carried out correctly to avoid losing the right to the 30% reduction. On the other hand, companies must analyze whether the payment of these amounts stems from an obligation or if it is a liberality, in order to determine its deductibility for Corporate Tax.