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V0543-21 ·9 March 2021 ·consulta-vinculante Medium impact
Tax

Companies cannot pass on uncollected income tax withholdings to employees

A company inquired whether it could reclaim from two employees income tax (IRPF) withholdings that were not made in 2019 but are now being claimed by the Tax Agency. The Directorate General for Taxes (DGT) ruled that there is no legal provision allowing companies to deduct such amounts from employees' wages or to claim them back from them.

In 5 key points

How it affects those involved

This ruling clarifies that the financial burden of uncollected tax withholdings rests with the employer rather than the employee, preventing companies from recovering these costs from staff.

Lifecycle

2021-03-09PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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