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Practical manual for Income Tax 2019.

Exemptions for income from economic activities

Community agricultural and fisheries policy subsidies and public aid

Regulations: Fifth Additional Provision of the Personal Income Tax Law

The following are exempt:

  • The positive income that arises as a result of the receipt of certain subsidies from the Community agricultural and fisheries policy, as well as other public aid received in the exercise of economic activities.

    The tax treatment of these subsidies and public aid is discussed in more detail in Chapter 7.

  • Also exempt public aid aims repair the destruction heritage elements caused by fire, flooding or
  • Public aid, other than these, received for the repair of damage suffered by assets due to fire, flooding, subsidence or other natural causes, will be included in the tax base only to the extent that it exceeds the cost of repairing them.

    Please note that the compensation received as a result of the destruction of insured assets provided for in article 3 of Royal Decree-Law 6/2011, of May 13, which adopts urgent measures to repair the damage caused by the seismic movements that occurred on May 11, 2011 in Lorca, Murcia ( BOE of the 14th), will be subject to the Fifth Additional Provision of the Personal Income Tax Law.

    Note: In no case will the repair costs, up to the amount of the aforementioned aid, be tax deductible or counted as an improvement.

  • Aid for the abandonment of road transport activity paid by the Ministry of Public Works to transporters.
  • Likewise, the perception of public compensation due to the mandatory slaughter of the livestock is declared exempt, within the framework of actions aimed at the eradication of epidemics or diseases. The exemption will only affect animals intended for breeding.
  • Finally, public aid to compensate for the temporary or permanent eviction of the taxpayer's habitual residence or the premises in which the owner of the economic activity carried out the same as a result of fire, flood, collapse or other natural causes is declared exempt.

Forestry subsidies

Regulations: Fourth Additional Provision of the Personal Income Tax Law .

Forestry subsidies granted to those who exploit forest farms managed in accordance with technical forest management plans, forest management, forestry plans or reforestation plans approved by the competent forestry authority, provided that the average production period, depending on the species in question, determined by the competent forestry authority, is equal to or greater than 20 years.