The Government proposes that victims of trafficking pay taxes for compensation

Controversy around the draft Law on Procedural Efficiency Measures of the Public Justice Service that was approved by the Council of Ministers on December 15, 2020. Specifically, the debate has been generated by the second final provision, which includes a modification in the Personal Income Tax (IRPF) law, which establishes an assumption by which the victims of traffic accidents will have to pay for the compensation they receive from the insurers.

The National Association of Lawyers for Victims of Accidents and Civil Liability (ANAVA-RC) has warned in a statement collected byEuropa Pressthat the draft law “hides the purely fiscal measure” with which the Government “intends to collect taxes with compensation for victims of road accidents.”

The text, signed by the previous Minister of Justice, Juan Carlos Campo, includes in the provision denounced by the entity the modification of article 7.d of the Law 35/2006, of November 28, on Personal Income Tax and partial modification of the law, which, although they maintain exempt from paying compensation as a consequence of civil liability for personal damages, including those derived from accident insurance contracts, establishes a new nuance: in cases in which compensation is result of an amicable agreement between the parties it will be required that “a neutral third party has intervened and the agreement has been raised to public deed.”

The compensation “has never been a capital increase”

The association, which includes more than 200 victims’ law firms from all over Spain and with greater representation in this sector, has criticized that the Government wants to make the modification “in a hidden way”. As they have explained, the proposed change “does not take into account that those injured or victims of traffic accidents suffer personal and property losses at the time they suffer a traffic accident due to the fault of a third party, and that compensation is intended It is precisely to compensate this decrease in equity with the full restitution of damages suffered, leaving the victim in the same position he was in before having the accident “

Manuel Castellanos, president of the association, has emphasized that, from the fiscal point of view, “the compensation has never been considered as an increase in assets, but rather as compensation for the decreases suffered as a result of the accident.”

For ANAVA-CR, in addition to being detrimental to the victim, the proposed change introduces variations in the processing of amicable out-of-court agreements between insurers and the injured parties that “will increase their costs, since it introduces the intervention of a figure calleda ‘neutral third party’, without any definition of their role or role, and requires ‘public deed’ when payment is made by an insurance company “, they have pointed out.

They have also warned that by paying the compensation obtained in the friendly agreements “what it would generate is a runaway increase in litigation, because citizens should wait for the judicial sentence so that their compensation is exempt from taxation, charging more, if possible, to the already overwhelmed administration of Justice. “

While the draft bill is still in the process of being processed, ANAVA-RC has sent two separate letters of protest to the technical secretary general of the Ministry of Justice, Jacobo Fernndez lvarez, and to the general director of Insurance, Sergio lvarez Camia, expressing his “most radical opposition “and has requested aurgent meeting with representatives of the Ministry of JusticeIn which the rest of the associations of accident victims and victims’ lawyers are also present at the national level.

Disclaimer: If you need to update/edit/remove this news or article then please contact our support team Learn more