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A taxpayer requested clarification regarding the timing of tax imputation for bonuses and disability improvements received via court ruling, as well as for default interest. The Directorate General of Taxes (DGT) ruled that both employment income and compensatory interest must be taxed in the financial year in which the judgment becomes final.
This ruling clarifies the tax year in which taxpayers must report income derived from legal settlements, ensuring consistency between the finality of a judgment and the tax obligation.
The tax team reviews your specific situation.
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