Exemption from Personal Income Tax (IRPF) for hearing aid and eyewear subsidies

The Dirección General de Tributos (DGT) has issued a relevant ruling regarding the nature of financial aid intended to cover health expenses, specifically concerning the acquisition of hearing aids and glasses when these are not covered by the public healthcare system.

What the DGT has ruled

The inquiry focused on determining whether these financial benefits should be considered employment income subject to taxation under Personal Income Tax (IRPF). The advisory body has established that financial aid for illness-related expenses that are not covered by the Health Service or the corresponding Mutual Fund, and which are intended for the treatment or restoration of health, shall not be considered income subject to tax.

However, the DGT clarifies that any other social benefit whose objective is to alleviate the recipient's economic situation, rather than the recovery of health, will constitute employment income subject to taxation. Therefore, for the aid to be excluded from taxation, it must strictly meet two requirements: it must be intended for the restoration of health and it must not be covered by public healthcare.

What this means for you

For the employee, this ruling represents a tax advantage if they receive aid to cover specific medical expenses that the public system does not assume. If the aid has a therapeutic or recovery purpose, it will not be included in their IRPF taxable base.

For companies, this pronouncement allows for the structuring of flexible remuneration systems oriented toward employee health. If a company implements a system to cover hearing aid or eyewear expenses, these benefits will not be taxed for the employee, provided it is verified that the expense is not covered by public healthcare and its purpose is the restoration of health.

What should be done

It is necessary to verify that the financial aid received has a clear purpose of treatment or health recovery. In the case of companies wishing to apply this type of benefit, they must ensure that the nature of the benefit is correctly documented to prevent the Administration from considering it employment income intended to alleviate the employee's economic situation.