Compensation paid by Public Administrations for personal injuries

Regulations: Art. 7.q) Law Income Tax

Compensation paid by public administrations for personal injury resulting from the operation of public services is exempt when established in accordance with the procedures provided for in Royal Decree 429/1993, of March 26, which approves the Regulation of the procedures of public administrations in matters of patrimonial liability ( BOE of May 4 and June 8) until October 1, 2016, and after that date by articles 91 and 92 of Law 39/2015, of October 1, on the Common Administrative Procedure of Public Administrations ( BOE of the 2nd) and articles 32 to 35 of Law 40/2015, of October 1, on the Legal Regime of the Public Sector ( BOE of day 2).

Note:Law 39/2015, of October 1, on the Common Administrative Procedure of Public Administrations ( BOE of October 2), repealed Royal Decree 429/1993, of March 26, with effect from October 2, 2016.

Important: the compensatory interest for late payment corresponding to an exempt compensation is also exempt in accordance with the provisions of article 7 of the Personal Income Tax Law . The reason is that the interest fixed, as an accessory obligation, must have the same consideration as the main concept from which it derives and must be qualified, in these cases, as exempt capital gains. See in this regard the Resolution of the Central Economic-Administrative Court (TEAC), dated May 10, 2018, in unification of criteria .