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V3221-18 ·19 December 2018 ·consulta-vinculante Medium impact
Tax

Withholding tax is not mandatory if employment income does not exceed established limits

A company inquired whether it must withhold Personal Income Tax (IRPF) when paying 3,612 euros annually over five years to former employees. The Directorate General for Taxes (DGT) ruled that, as the amounts do not exceed the relevant quantitative thresholds, there is no obligation to withhold.

In 5 key points

How it affects those involved

This clarification provides legal certainty for companies regarding the non-obligation to apply tax withholdings on small, periodic payments to former employees that fall below statutory thresholds.

Lifecycle

2018-12-19PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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