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A query was raised regarding when benefits accrued in the previous year but paid in the early months of the current year should be taxed. The DGT ruled that attribution depends on when the payment becomes due and that, if considered arrears, a 15% withholding tax rate applies.
This clarification provides certainty for taxpayers and employers regarding the timing of tax liability for retroactive payments and the applicable withholding rates for arrears.
The tax team reviews your specific situation.
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