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Practical Income Manual 2021.

Tax specialties of certain subsidies and public aid

A. Community Agricultural Policy subsidies and other public aid (current subsidies)

Regulations: Additional Provision Fifth Law Personal Income Tax

Positive income that is revealed as a result of:

• The perception of the following aid from the community agricultural policy:

  1. Definitive abandonment of vineyard cultivation.

  2. Bonus for uprooting apple plantations.

  3. Bonus for uprooting banana trees.

  4. Permanent abandonment of milk production.

  5. Definitive abandonment of the cultivation of pears, peaches and nectarines.

  6. Start-up of pear, peach and nectarine plantations.

  7. Definitive abandonment of the cultivation of sugar beets and sugar cane.

• The perception of the following aid from the community fisheries policy:

  1. Definitive cessation of the fishing activity of a vessel and its transfer for the constitution of mixed companies in third countries.

  2. Definitive abandonment of fishing activity.

• The receipt of public aid that aims to repair the destruction , due to fire, flood, volcanic eruption or sinking, of heritage elements.

As a consequence of the eruption of the Cumbre Vieja volcano on the island of La Palma, the wording of section 1.c) of the fifth Additional Provision of the Personal Income Tax Law is modified, with effect from January 1, 2021, by article 4.1 of 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 volcanic eruption as a cause to declare exempt the receipt of public aid that is intended to repair the destruction caused by it to heritage elements.

• The receipt of aid for abandoning road transport activity paid by the Ministry of Public Works (currently, the Ministry of Transport, Mobility and Urban Agenda) to transporters who meet the requirements established in the regulations governing the granting of said aid.

See Order FOM /3218/2009, of November 17 (BOE of 30).

• The perception of public compensation, due to the mandatory sacrifice of animals intended for the reproduction of the livestock herd, within the framework of actions aimed at the eradication of epidemics or diseases.

• Public aid other than those previously listed received for the repair of damage suffered to heritage elements due to fire, flood, subsidence or other natural causes , will only be included in the tax base in the part that exceeds the cost of repairing them.

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.

Nor will public aid received to compensate for the temporary or permanent eviction for identical reasons from the premises in which the owner of the economic activity carried out the same will be included in the personal income tax tax base.

Rules for calculating the income that is not included in the personal income tax base

Although the public subsidy or aid tries to absorb the possible loss experienced in the assets, in those cases in which the amount of these subsidies or aid is lower than the losses or decreases in value that, if applicable, have occurred In the assets, the negative difference may be recorded in the declaration as an asset loss.

When there are no losses, only the amount of the aid will be excluded from taxation.

The following table shows the tax treatment of these subsidies and public aid based on the amount received and the result produced (capital gain or loss) in the elements to which the aid or subsidy refers.

Notes to the box:

(*) Determined in accordance with the general personal income tax rules for calculating the amount of capital gains and losses, without computing the amount of the aid or subsidy. (Back)

(**) This assumption may occur in those cases in which the realizable value of the damaged or destroyed assets is greater than the net book value of the same elements. (Back)

Sign of the heritage alteration produced (*) Amount of the subsidy or aid receivedIncome that must be included in the declaration
Loss Greater than the property loss None
Less than the property loss Property loss (difference between the subsidy or aid received and the loss experienced)
Revenue (**) Any Only the capital gain obtained

B. Forest subsidies

Regulations: Additional Provision fourth Law Personal Income Tax

Subsidies granted to those who exploit forestry farms managed in accordance with technical forest management plans, forestry planning, forest management plans or reforestation plans approved by the competent forestry administration will not be included in the tax base, provided that the average production period , depending on the species in question, is equal to or greater than 20 years.

C. Financial aid to high-level athletes

Regulations: Art. 4 Regulation Personal Income Tax

By virtue of the exemption established in article 7.m) of the Personal Income Tax Law for this aid, it will not be included among the income from the professional activities that, if applicable, they may carry out. Those who have recognized the status of high-level athletes receive financial aid for sports training and technical training, with a limit of 60,100 euros per year.

The exemption is conditional on compliance with the following requirements:

  • That its beneficiaries have the status of high-level athletes recognized, in accordance with the provisions of Royal Decree 971/2007, of July 13, on high-level and high-performance athletes (BOE of 25).

  • That are financed, directly or indirectly, by the Higher Sports Council, by the Olympic Sports Association, by the Spanish Olympic Committee or by the Spanish Paralympic Committee.