18. Compensation paid by Public Administrations for personal injuries

Regulations: Art. 7.q) Law PIT

Compensation paid by Public Administrations for personal injury (physical, psychological, or moral) resulting from the operation of public services is exempt from VAT when established in accordance with the procedure provided for in both Law 39/2015, of October 1, on the Common Administrative Procedure of Public Administrations, which regulates in its articles 65, 67, 81, 86.5, 91, and 92 the specific features of the procedure for liability claims, and Law 40/2015, of October 1, on the Legal Regime of the Public Sector, which specifically dedicates its Chapter IV, articles 32 to 37 inclusive, to regulating the regime of liability claims of Public Administrations regarding its principles, concurrent liability, scope of compensation, private law liability, and the enforcement of liability claims by authorities and personnel serving the Public Administrations. Public Administrations and Criminal Liability.

Note: Law 39/2015, of October 1, on the Common Administrative Procedure of Public Administrations (Official State Gazette of October 2) repealed, with effect from October 2, 2016, Royal Decree 429/1993, of March 26. which approves the Regulation of the procedures of the Public Administrations in matters of patrimonial liability without this implying any alteration in the scope of the exemption.

Note: Compensatory interest for late payment corresponding to exempt compensation is also exempt in accordance with the provisions of Article 7 of the Law on PIT. The reason is that the fixed interest, as an accessory obligation, must be considered the same as the main concept from which it derives and be classified, in these cases, as exempt capital gain. See in this regard the Resolution of the Central Economic-Administrative Court ( TEAC ), dated May 10, 2018, Claim number 00/05260/2017, issued in an extraordinary appeal for the unification of criteria.