Taxation of business restructuring aid in Personal Income Tax

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the tax treatment of extraordinary aid granted to workers during business restructuring processes. This issue arises from the doubt as to whether such benefits, regulated by Royal Decree 908/2013, could receive a differentiated or exempt tax treatment.

What the DGT has ruled

The inquiry focuses on the nature of the aid granted under Article 4.2 of Royal Decree 908/2013, especially in scenarios where the company has not paid the legal severance pay. The body has ruled that these amounts are classified as employment income, given that their origin derives directly from the existing employment relationship between the worker and the entity.

Furthermore, the DGT clarifies two fundamental points regarding their tax management:

• Inexistence of exemptions: This aid is not covered by any exemption provision provided for in current regulations.
• Temporal imputation: The amounts must be declared in the tax period in which they become due, once the right to their granting has been recognized.
• Impossibility of reduction: The reduction provided for in Article 18.2 of the LIRPF is not applicable, as this aid does not meet the requirements regarding the generation period nor the scenarios established in the Regulations.

What it means for you

If you are a worker who has received this aid due to a restructuring process in your company, you must bear in mind that the full amount will be taxed in your income tax return as part of your employment income. You cannot consider these amounts as exempt income nor apply the reduction for employment income generated in periods of more than two years, as the regulations do not include this type of aid within that tax benefit.

What you should do

It is necessary to verify the nature of any amount received through restructuring processes to ensure its correct inclusion in the Personal Income Tax (IRPF) taxable base. Since the tax treatment is strict and does not allow for the usual reductions for certain types of employment income, it is recommended to analyze the documentation granting the aid to confirm the exact moment it becomes due and to avoid errors in temporal imputation.