Taxation of legal compensation in Spain
#1
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Thread Starter
Joined: Jul 2011
Location: Nueva AndalucĂa
Posts: 48
Taxation of legal compensation in Spain
I hope our tax expert may be able to help me on a question.
I am currently suing a former medical practitioner in the UK for negligence. If I agree a compensation deal with his insurers, is that tax free in Spain, like it would be in the UK? I am currently non-resident but will become tax resident next year. If there is a possibility any damages would be taxed in Spain, I may need to consider settling this year and, maybe, not getting such a good deal.
TIA
I am currently suing a former medical practitioner in the UK for negligence. If I agree a compensation deal with his insurers, is that tax free in Spain, like it would be in the UK? I am currently non-resident but will become tax resident next year. If there is a possibility any damages would be taxed in Spain, I may need to consider settling this year and, maybe, not getting such a good deal.
TIA
Last edited by njf; Aug 20th 2014 at 11:31 pm.
#2
Re: Taxation of legal compensation in Spain
There are all sorts of exemptions for compensation payments, many related to working, ie redundancy, unfair dismissal, etc and these may have limits to the amount that is tax exempt.
There is, however a paragraph in the tax guide that says that compensation payments as a result of a judicial process are exempt in full.
I would expect your compensation to fall in that category and hence be exempt.
However, I would be inclined to talk to a professional tax advisor to be absolutely sure.
There is, however a paragraph in the tax guide that says that compensation payments as a result of a judicial process are exempt in full.
I would expect your compensation to fall in that category and hence be exempt.
However, I would be inclined to talk to a professional tax advisor to be absolutely sure.
#3
Forum Regular
Thread Starter
Joined: Jul 2011
Location: Nueva AndalucĂa
Posts: 48
Re: Taxation of legal compensation in Spain
There are all sorts of exemptions for compensation payments, many related to working, ie redundancy, unfair dismissal, etc and these may have limits to the amount that is tax exempt.
There is, however a paragraph in the tax guide that says that compensation payments as a result of a judicial process are exempt in full.
I would expect your compensation to fall in that category and hence be exempt.
However, I would be inclined to talk to a professional tax advisor to be absolutely sure.
There is, however a paragraph in the tax guide that says that compensation payments as a result of a judicial process are exempt in full.
I would expect your compensation to fall in that category and hence be exempt.
However, I would be inclined to talk to a professional tax advisor to be absolutely sure.