The Spanish Central Economic and Administrative Tribunal
(TEAC) and State Tax Agency (AEAT) recently concluded that an
invitation to a medical practitioner to attend a medical
seminar means that they obtain income in kind.
According to the TEAC (in a decision dated April 4
2017) and AEAT (in a report on May 5 2017,
which mirrored that decision) this income in kind may be earned
income or income from an economic activity, according to
whether the invitation is made to a hospital (which sends a
representative on its behalf) or personally to the medic
(whether self-employed or a hospital employee), respectively.
In both cases, tax will have to be withheld from the income in
kind by the entity that made the invitation.
There is no change to this conclusion, say both authorities,
even if the invitations are geared towards the medic's
training, because when the law exempts training from tax, it
only does so for workers who are employees, and the initiative
to provide the training must have come from the employer (who
also must have funded it in full). The AEAT added that these
expenses on attending seminars are not eligible for the relief
for per diems (travel, meal and overnight expenses) either,
because that relief may only be claimed by the recipients of
earned income under an employment contract or a special-charter
relationship for public workers.
It would appear that no consideration has been given to the
definition of income in kind in the Personal Income Tax Law.
This definition dictates that there will only be income in kind
(and the law makes no distinction here between earned income
and income from an activity) when it serves to satisfy strictly
private purposes. When clearly, the training the medical
practitioners receive by attending events, invited by
pharmaceutical companies, directly benefits their medical
practice, their medical expertise, their training in new
treatments, products or innovations (…), besides
contributing to maintaining the quality of the system (which we
can safely say benefits the patient at the end of the
Both documents (the decision and the report) have caused
considerable concern among both medics and pharmaceutical
companies, in view of the effect this administrative standard
may have on medical training; and have received a response from
the Minister of Finance and Public Service dated May 29 2017,
stating that "the government's intention to amend the Personal
Income Tax Regulations to clarify in the legislation that the
training courses of health personnel, funded by organisations,
are not taxable for personal income tax purposes".
In July 2017, the Minister published its proposed amendment
to the Personal Income Tax Regulations, which seems to be aimed
at protecting employees working on medical centres who are
authorised by their employers to attend the medical seminars.
Surely, the temporary effect of the amendment, in case it is
approved, will provoke discussions. Meanwhile, the AEAT's tax
inspectors have already started work on these matters.
Abigail Blanco (firstname.lastname@example.org)