The news hit the media a few weeks ago, and if you have been overlooked, we tell you that the maternity benefit (paid by Social Security) It is not considered as an exemption provided in the regulations of the Personal Income Tax (IRPF). The ruling in July 2016, of the Superior Court of Justice of Madrid, considered this benefit as exempt, for which the Tax Agency was obliged to return to the claimant woman, more than 3000 euros, in concept of withholdings that had been practiced .
As expected, the claims followed one another. Now the Central Economic Administrative Court (TEAC), unifies criteria (in agreement with regional courts) and resolves that "the maternity benefit is not exempt from personal income tax." Thus, the administrative route is closed, although the existence of sentences causes the judicial one to remain active. Following the personal income tax law (specifically article 7): “the only exempt benefits paid by Social Security are family benefits”.
This is the case of the economic benefit of a single payment for birth or adoption, the allowance for a dependent child or less, orphan's pensions ... On the other hand, The exemption must only apply to maternity benefits that are paid by local or regional entities, but not to those paid by the Social Security Institute.
The TEAC criterion will be extended to the entire Tax Administration, and coinciding with the Superior Court of Justice of Andalusia (last October). The note provided by the Tax Agency, specifies that “it must be borne in mind that the maternity benefit paid by Social Security has the function of replacing the normal remuneration (not exempt) that the taxpayer would obtain for her usual work, and that she has ceased to receive for the enjoyment of the permit. The cause for granting benefits is not maternity itself, but the suspension of the employment relationship "