Victims of fraud with an identified perpetrator cannot deduct the loss immediately

Determining the moment when a fraud victim can include a financial loss in their income tax return is a recurring point of friction. The Dirección General de Tributos (DGT) has specified the tax treatment of these amounts when the perpetrator of the deception is known, distinguishing it from cases where the responsible party remains anonymous.

What the DGT has resolved

The tax authority's criteria establish a fundamental distinction based on the identification of the responsible party:

• If the perpetrator has not been identified: An immediate financial loss occurs, allowing it to be computed in the tax year in which the harm occurs.
• If the perpetrator has been identified: There is no direct financial loss, but rather the acquisition of a credit right against the fraudster. In this scenario, the loss can only be computed when the credit is judicially uncollectible or when the circumstances of article 14.2.k) of the IRPF Law are met.

For the loss to be included in the general taxable base under the special rule, specific circumstances must be met, such as a debt write-off in insolvency proceedings or the passing of one year in a forced execution procedure without success.

What this means for you

If you have been a victim of fraud and have managed to identify the perpetrator, you cannot automatically apply the financial loss to your income tax return at the moment you lose the money. Tax-wise, you possess a right to claim that amount, and as long as that right is enforceable, the Administration does not recognize the definitive loss.

This implies that the deduction is contingent upon the effectiveness of legal collection actions. Only when the impossibility of recovering the capital through judicial channels is demonstrated, or when the terms and conditions of current regulations are met, can the loss be included in the general taxable base for compensation.

What you should do

In such a situation, it is necessary to rigorously monitor judicial execution proceedings. The inclusion of the loss in the IRPF will depend on the documentation proving the uncollectible status of the credit or compliance with the temporal and legal requirements established in Law 35/2006. It is recommended to assess each particular legal situation to determine the exact moment of tax imputation.