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A healthcare worker enquired about the taxation of back pay related to professional career progression spanning several years. The DGT ruled that such payments must be taxed in the year the administrative resolution is issued, and that the 30% reduction for irregular income may be applied.
This ruling clarifies the timing of tax liability for retroactive salary increases resulting from administrative decisions, confirming that the year of resolution, rather than the years the income was earned, is the relevant period for taxation.
The tax team reviews your specific situation.
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