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Practical manual for Income Tax 2020.

14. Unemployment benefits received in the single payment modality

Regulations: Art. 7.n) Law Income Tax

Unemployment benefits granted by the respective managing entity are exempt, regardless of their amount, when they are received in the form of a single payment established in Royal Decree 1044/1985, of June 19, which regulates the payment of unemployment benefits in the form of a single payment ( BOE of July 2), provided that the amounts received are used for the purposes and in the cases provided for in the aforementioned regulation.

Please note that, with effect from 10 October 2015, article 34.1 of Law 20/2007, of 11 July, on the Statute of Self-Employment, as amended by article 1.3 of Law 31/2015, of 9 September, which modifies and updates the regulations on self-employment and adopts measures to encourage and promote self-employment and the Social Economy ( BOE of the 10th), establishes that the provisions of Royal Decree 1044/1985, of 19 June, which establishes the payment of unemployment benefits in the form of a single payment, will be maintained, including the modifications incorporated by subsequent regulations, insofar as they do not conflict with the rules indicated in the aforementioned article 34. In this regard, the sole repealing provision of the aforementioned Law 31/2015, of September 9, repealed the fourth transitional provision of Law 45/2002, of December 12, on urgent measures for the reform of the unemployment protection system and improvement of employability, which until then regulated the rules for receiving this benefit.

The activities for which the single unemployment payment can be requested are:

  • Starting a self-employed activity.
  • Joining an existing or newly created cooperative as a working or permanent member.
  • The creation of a labour company or joining an existing one, as a working partner or as a permanent employee.
  • The creation of a newly established business entity (or incorporation into one that has been created in the previous 12 months, if control is to be had).

This exemption will be conditional on maintaining the action or participation for a period of five years, in the event that the taxpayer has joined labor companies or worker cooperatives or has made a contribution to the share capital of a commercial entity, or on maintaining, for the same period, the activity, in the case of a self-employed worker.