Skip to content
V0597-22 ·21 March 2022 ·consulta-vinculante Medium impact
Tax

A 15% withholding tax rate applies to back payments for services rendered in previous years

A local council has requested clarification on the withholding tax rate to apply when paying differences in bonuses for extraordinary services performed in 2019, 2020, and 2021, which are being corrected in 2022. The Directorate General of Taxes (DGT) has ruled that, as these constitute income from previous years, the fixed rate of 15% must be applied.

In 6 key points

How it affects those involved

This ruling clarifies the tax treatment for retroactive payments, ensuring that backdated bonuses are subject to the standard withholding rate applicable to the period in which the income was earned.

Lifecycle

2022-03-21PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

Does this provision affect you?

The tax team reviews your specific situation.

Talk to the tax team
This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
Email
Contact