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Traffic victims may have to pay taxes on compensation received in compensation for the damages they have suffered after an accident.

This situation, which has never occurred before in Spain, will be a reality if the preliminary draft of the Law on Procedural Efficiency measures goes ahead, promoted by the Ministry of Justice

and which is still in process, although it has already had the approval of the Council. of Ministers in mid-December 2020.

"Once again, the Government resorts to a legal amendment in another area to sneak a tax-type measure into us,"

they denounce

from Anava-RC

, the National Association of Lawyers for Victims of Accidents and Civil Liability.

The association has sent letters of protest to both the Ministry of Justice and the General Directorate of Insurance.

For now they have not had a response to their complaint, also supported by the General Prosecutor for Road Safety.

Change in friendlies

Specifically, they claim against the amendment contained in the second final provision of the draft law. In it, the section that says that all compensation dictated by a court will be exempt from paying personal income tax.

But, as a novelty, it requires that in those that are reached by an amicable agreement between the parties (usually with the insurance company), “a neutral third party” intervenes as mediator and “that the agreement be raised to a public deed”

.

These are two requirements that have never been raised before, the first being completely indefinite, and that will entail expenses that will be deducted from the amount that corresponds to the victim or their family members.

The other alternative, not meeting these conditions, would entail

paying taxes on the money received "although it is not even known if in a fixed or scaled percentage according to the taxpayer's income,"

says Manuel Castellanos, president of ANAVA-RC.

UNKNOWLEDGMENT OF BAREMO

"The initiative shows complete ignorance of

the 2015 Baremo Law, which establishes that compensation must seek full compensation for the victim after the damage suffered," Castellanos clarifies.

"In addition, this norm also encourages agreements to be reached between the parties to decongest the courts, the same thing that the draft law seeks. Instead, the effect will be the opposite.

Because the injured person, or their family members,

will only have two options

to avoid reducing, via taxes, the amount they receive in compensation.

One, get the insurer to pay the extra expenses

involved in hiring the arbitration and formalizing the deed.

Failed this way, judicialize the procedure.

This would generate "a runaway increase in litigation, as citizens should wait for the court ruling so that their compensation is exempt from taxation, charging more, if possible,

to the already overwhelmed Administration of Justice."

Eager to fundraise

The problem, says Castellanos, is that

"someone has read equity compensation and has thought directly about raising more."

Because, from a tax point of view, these payments have never been considered as an increase in assets, but as compensation for the decreases suffered as a result of the accident.

Damages that can be personal, moral, in the form of lost profits or property,

starting with the case of having to repair your own car.

The ultimate objective of the current system is that whoever suffers a traffic accident remains, to the extent permitted by the law, in the same position they were before the accident.

“It is as if, in the case of home insurance, our kitchen burned and we had a 20,000-euro policy. That money that they pay us will never make us 'richer',

it is simply so that we can have the kitchen again as before the fire ”, as an example, the president of the lawyers for the victims.

As it is in the processing phase, there is still time to stop the project, so

the association has requested an urgent meeting with the Ministry of Justice

in which the other associations of accident victims and lawyers for victims of accidents are also present. Nacional level.

According to the criteria of The Trust Project

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