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V0274-16 25 January 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Back pay from administrative decisions must be attributed to the year it becomes due

A civil servant inquired which tax year should be used to declare back pay for a productivity supplement received in 2015. The Directorate General of Taxes (DGT) ruled that, because the payment stems from an administrative decision rather than a court judgment, the amount must be attributed to the year in which it becomes due, which in this case is 2015.

The question raised

Temporal attribution of arrears.

The DGT's ruling

Income from employment is attributed to the tax period in which it becomes due to the recipient. Since the amount is not pending judicial resolution but is determined by an administrative resolution, enforceability occurs in the fiscal year in which said resolution is issued. As these arrears cover a generation period exceeding two years, the 30% reduction provided for in Article 18.2 of the Personal Income Tax Law is applicable.

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