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A civil servant has requested clarification on how to tax back pay related to professional career progression and a judicial ruling received in 2020. The Directorate General of Taxes (DGT) clarifies the temporal imputation of both concepts and the applicability of the tax reduction for irregular income.
This ruling provides clarity for civil servants regarding the tax treatment of back pay, specifically concerning the timing of income recognition and eligibility for tax relief on irregular earnings.
The tax team reviews your specific situation.
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