SHOULD TAX INDEMNIFICATIONS BY TRAFFIC ACCIDENT?
Compensations for traffic accidents are exempt from taxation in the personal income tax.
With only one exception, that the compensation is obtained extrajudicially and this is superior to what is established in the Traffic Accident Scale.
This exception is very unusual to occur, because in an out-of-court settlement the insurance company seldom offers a reasoned offer greater than the maximum amount that would correspond to the injured party.
Moreover, it is customary for such compensation to be less than what really corresponds to the victim of the traffic accident.