2. Exemptions for income from economic activities
• Subsidies from the community agricultural and fishing policy and public aid
Regulations: Fifth Additional Provision of the Personal Income Tax Law
They are exempt:
The positive income that becomes evident as a consequence of the receipt of certain subsidies from the community agricultural and fishing 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 are public aid that is intended to repair the destruction , due to fire, flood or sinking of heritage elements .
Public aid, other than these, received for the repair of damage suffered by heritage elements due to fire, flood, subsidence, volcanic eruption or others natural causes, will be included in the tax base only in the part in which they exceed the cost of repairing them.
Please note that the compensation received as a consequence 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 14), the fifth Additional Provision of the Personal Income Tax Law will apply to them.
Likewise, as a consequence of the eruption of the Cumbre Vieja volcano on the island of La Palma, the wording of the fifth Additional Provision of the Personal Income Tax Law has been modified, with effect from January 1, 2021, by article 4.1 of the Royal Decree-Law 25/2021, of November 8, Royal Decree-Law 25/2021, of November 8, on measures regarding Social Security and other fiscal measures for social support of the island of La Palma (BOE of 6 ), to specifically include the term "volcanic eruption" as a reason to declare exempt the receipt of public aid that aims to repair the destruction caused by it to heritage elements.
Note: In no case will the repair costs, up to the amount of the aforementioned aid, be tax deductible nor will they be counted as an improvement.
Aid for abandoning road transport activity paid by the Ministry of Public Works (currently the Ministry of Transport, Mobility and Urban Agenda) to transporters.
Likewise, the receipt of public compensation due to the mandatory slaughter of 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 reproduction.
Finally, public aid received 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 as a consequence of fire, flood, subsidence or other natural causes.
See in this regard Royal Decree-Laws 10/2021, of May 18, which adopts urgent measures to alleviate the damage caused by the storm "Filomena" ( BOE of 19) and 20/2021, of October 5, by which urgent support measures are adopted for the repair of damage caused by volcanic eruptions and for the economic and social reconstruction of the island of La Palma ( BOE of 6).
• Forest subsidies
Regulations: Fourth Additional Provision of the Personal Income Tax Law .
Forestry subsidies granted to those who exploit forestry farms managed in accordance with technical plans for forest management, forestry planning, forestry plans or reforestation plans approved by the competent forestry administration, provided that the average production period, according to the species of which in question, determined by the competent Forestry Administration, is equal to or greater than 20 years.