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A taxpayer inquired whether the 30% reduction under Article 18.2 of the Personal Income Tax Act (LIRPF) could be applied to backdated destination allowances obtained via a court ruling. The Directorate General for Taxes (DGT) ruled that these do not constitute notoriously irregular income and that the reduction may only be applied if the generation period for said back payments exceeds two years.
The tax team reviews your specific situation.
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