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A civil servant has enquired about how to declare payments owed following a court ruling and the refund of a retirement pension. The Directorate General of Taxes (DGT) has ruled that amounts pending a judicial decision must be attributed to the year in which the ruling becomes final, while the refund of unduly received income must be managed by rectifying the tax year in which it was originally declared.
This ruling clarifies the timing for tax reporting regarding judicial awards and the procedure for correcting previous tax returns when income is refunded.
The tax team reviews your specific situation.
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