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A farmer inquired which period should be used to declare income from products sold in 2016 but collected in 2017 following a change in estimation method. The DGT ruled that, as the cash basis was not selected, the accrual basis must be applied.
This ruling clarifies that taxpayers not using the cash basis must account for income based on when the sale occurs rather than when the cash is received, affecting the timing of tax liabilities.
The tax team reviews your specific situation.
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