Deduction for income in Ceuta and Melilla: habitual residence requirement

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the application of the deduction for income obtained in Ceuta and Melilla. The issue focuses on determining whether taxpayers who receive employment income in these territories can benefit from the tax reduction without meeting the residence requirement in the area.

What the DGT has ruled

The binding ruling establishes that it is not possible to apply the 60 percent deduction of the proportional total tax liability for income obtained in Ceuta or Melilla if the taxpayer does not have their habitual and effective residence in said cities. This criterion applies specifically to article 68.4.2º of the Personal Income Tax Law (LIRPF).

The resolution underlines that the prohibition extends to employment income in all its forms. This includes pensions, even if these originate from labor activities previously carried out in Ceuta or Melilla. The determining factor for the right to the deduction is not the origin of the income, but rather the taxpayer's place of residence.

What this means for you

This criterion directly affects individuals who have performed labor activities in Ceuta or Melilla but who, for various reasons, have moved their domicile to other territories. If you receive income or pensions derived from your activity in these cities, but your habitual residence is located outside of them, you will not be able to apply the corresponding tax deduction.

What you should do

It is necessary to verify that tax residence and habitual residence coincide with the territory where the deduction for income from Ceuta or Melilla is intended to be applied. In situations of geographic mobility or changes of domicile, compliance with the requirements established in the LIRPF must be confirmed to avoid possible requests from the Tax Administration. Each personal situation must be analyzed to ensure compliance with current regulations.