ATT ASSESSORS Insurance and services Balaguer Lleida

Possible exemption to the IRPF of maternity benefits


A recent ruling by the High Court of Justice of Madrid dated July 6, 2016 stated that the maternity benefit paid by the Social Security is exempt from personal income tax. The decision contradicts the criteria of the Tax Office. The effect of the sentence is limited to the case in litigation and does not generate jurisprudence, but opens the door to claiming that taxpayers who have received maternity benefits since 2012 claim the return of personal income tax.

When a worker gives birth, she is entitled to 16 weeks off, which she can share in part with her father. During this period, the Social Security is the one who pays the salary through the maternity benefit, which is equivalent to the contribution base. The Tax Agency has always argued that this aid should be taxed in income tax as a work performance. A position that the High Court of Justice of Madrid has just taken in a recent ruling. In it, the TSJ considers that the maternity benefit falls within the exempt income provided by IRPF law.

The controversy is not new and its peak was in 2013, when the Tax Office was forced to issue an informative note denying the tax exemption of maternity benefit. An SMS that was viral urged the taxpayers to demand the return of the personal income tax on benefits for maternity, which raised the request for rectifications and forced the Treasury to reaffirm its criterion through a statement.
The conflict was without more echo. Up until now, when the Madrid Court of Appeals has given the reason to a taxpayer who requested a refund of 3,135 euros that he paid as income tax when receiving a maternity benefit of 11,679 euros. The effect of the sentence is limited to the specific case of the litigation, that is, it does not generate jurisprudence nor obliges the Tax Agency to modify the criterion. The Treasury will continue to deny the exemption. However, without a doubt, it raises the chances of successful taxpayers who demand the return.

Taking into account the prescription periods, taxpayers who received benefits from maternity benefits from January 2012 can submit to the Tax Agency a self-assessment of the personal income tax in which they request the return of the tax paid by the Maternity benefit The Treasury will probably deny the petition, which would oblige the taxpayer to go to the Administrative Economic Court and, later, to the High Court of Justice of his community; In short, the process is not simple nor automatic. In fact, the ruling of the TSJ of Madrid resolved a request for rectification that was denied by the Tax Agency 2014.

The taxpayers who have been mothers this year or will be in the future is preferable or rather advisable to follow the criteria of the Treasury and pay tribute for maternity benefits, although they subsequently have the option to apply for The return of personal income tax and initiate administrative or judicial proceedings. Acting like this, the sanction that the Treasury would impose would be avoided in the case that it is not directly taxed for help.

The Social Security allocates around 1,600 million in maternity benefits each year and the Treasury enters 256 million in income tax. The impact of returning IRPF paid for this aid from 2012 to 2016 could reach 1,300 million and benefit more than one million contributors. This is a theoretical exercise, but illustrates the importance that the interpretation of the TSJ Madrid would have prevailed and extended.

On the other hand, the paternity leave, which currently amounts to fifteen days, would also fit within the scope of the tax exemption defending the sentence.

The conflict arises from the interpretation of two paragraphs of article 7, letter h, of the IRPF law. "(...) Other public benefits by birth, part or multiple adoption, adoption, dependent children and orphanhood will be exempt," the rule says. And it adds: "The public benefits for maternity perceived by the autonomous communities or local entities will also be exempt." Treasury interprets that this last paragraph "determines a clear differentiation" in the sense that it only declares exemptions for autonomic and local maternity benefits. On the other hand, the TSJ of Madrid points out that the maternity benefit paid by the Social Security must be "necessarily" in the area of ​​general exemption and that the paragraph referring to communities and local entities simply broad The tax benefit and in no case acts as a restriction.

The recent ruling alludes to the conclusion that the legislator seems to have wanted to include in the exemption not only maternity benefits received from the autonomous communities or local entities, as evidenced by the examination of the explanatory memorandum to the Law 62/2003, of December 30, on fiscal, administrative and social order measures, which introduced the aforementioned exemption in Law 40/1998 on Income Tax of Physical Persons and passed to Royal Decree Legislative 3/2004, of March 5, which approves the revised text of the Income Tax Law of Physical Persons. In this statement of reasons it is expressed: "In the income tax of natural persons, in the first place, it establishes the exemption of the perceived public benefits by birth, multiple birth, adoption, maternity and child in charge , Which includes the economic benefits for the birth of a child and for a multiple party that is envisaged by Royal Decree Law 112000, of January 14, ... ". From the text contained in the aforementioned statement of reasons it follows that the exemption established includes maternity benefits and not only those of birth, multiple births, adoption and dependent children, since it refers expressly to maternity benefit And it does not seem to pretend that its scope is limited to those granted by the autonomous communities or local entities, but rather it seeks to establish the exemption of all benefits for maternity, regardless of the public body that is perceived, the Which leads us to believe that the second paragraph deals with extending the scope of the first paragraph to those received from the autonomous communities or local entities, but considering considering the maternity benefits in the first paragraph.