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A retired Clerk of the Administration of Justice asks which tax year should be used to declare financial compensation for untaken holidays received in 2019. The Directorate General of Taxes (DGT) rules that it must be attributed to the tax year in which the income became due, which is generally upon retirement.
This ruling clarifies the timing for tax reporting regarding holiday pay received after retirement, ensuring income is taxed in the year it becomes legally enforceable.
The tax team reviews your specific situation.
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