Tax treatment of RETA contributions paid by mutual insurance companies

The Directorate General of Taxes (DGT) has issued a relevant ruling for self-employed workers undergoing periods of temporary disability. The issue focuses on determining the tax nature of the contributions to the Special Regime for Self-Employed Workers (RETA) that mutual insurance companies assume on behalf of the beneficiary during said period.

What the DGT has ruled

The inquiry addresses the deductibility of Social Security contributions paid during temporary disability. According to the interpretation of the regulations, benefits received under this concept are classified as income from employment, in accordance with the provisions of Article 17.2.a).1 of Law 35/2006.

The technical criterion indicates that income from employment includes the amount of the RETA contributions that the mutual insurance company pays on behalf of the self-employed worker. However, the resolution establishes a fundamental distinction for determining the taxable base: if the self-employed worker pays taxes using the direct estimation method, this payment of contributions constitutes a deductible expense to determine the net income of their economic activity.

What it means for you

For self-employed workers receiving benefits for temporary disability, this pronouncement clarifies the dual nature of these amounts. On one hand, the amount of the contributions assumed by the mutual insurance company must be included in the income from employment. On the other hand, for those using the direct estimation method, said amount can be applied as a necessary expense for obtaining income.

This distinction is key to avoiding errors in the Personal Income Tax (IRPF) return, ensuring that the integration of benefits and the deductibility of expenses are carried out in accordance with Law 35/2006 and the General Tax Law.

What you should do

It is necessary to analyze the particular situation of each professional in the event of temporary disability. It is recommended to verify the estimation method applied to the economic activity and ensure that the treatment of benefits and the contributions assumed by the mutual insurance company is correctly reflected in the tax return. Each case requires a technical assessment to correctly apply the current regulations.