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A civil servant received back pay for a year during which they were suspended from duty and salary following the annulment of a disciplinary sanction. The Directorate General of Taxes (DGT) has ruled that these amounts must be taxed in the financial year in which the court judgment becomes final.
This ruling clarifies the tax timing for retroactive payments resulting from legal victories, ensuring they are taxed when the right to receive them is legally certain.
The tax team reviews your specific situation.
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