Grants under Royal Decree 477/2021 are not subject to Personal Income Tax

Obtaining subsidies usually implies a tax impact for the taxpayer. In general terms, receiving financial aid for carrying out works is considered a capital gain that must be included in the general income for the tax year in which the payment is received. However, there are regulatory exceptions that modify this tax treatment.

What the DGT has ruled

The Dirección General de Tributos (DGT) has clarified the tax treatment of subsidies granted within the framework of Royal Decree 477/2021, aimed at promoting energy efficiency. The advisory body has determined that, although the general rule would require taxation on these grants, the fifth additional provision of the Personal Income Tax Law (LIRPF) establishes a specific exception.

According to this regulation, the aid granted under said Royal Decree will not be included in the IRPF taxable base. Therefore, as the subsidy is covered by this legal framework, the taxpayer is not obliged to declare said amount as income.

What it means for you

This ruling has direct relevance for individuals who have received public funds to improve the energy efficiency of their homes or properties under this regime. It means that the amount received will not increase your tax burden nor affect your income tax taxable base, preventing the aid from losing value due to taxation.

What you should do

It is essential to verify that the subsidy received is indeed covered by Royal Decree 477/2021 to apply this exempt treatment. Upon receiving funds of this nature, it is recommended to:

• Check the award resolution to confirm the applicable regulatory framework.
• Keep all documentation that proves the origin of the aid.
• Assess each particular situation with a professional to ensure correct treatment in your tax return.