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V0279-14 5 February 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Variable remuneration earned after death is subject to IRPF for the deceased and ISD for the heir

A query was raised regarding whether variable production-based remuneration, paid after a worker's death, should be taxed under Personal Income Tax (IRPF) or Inheritance Tax (ISD). The Directorate-General for Tax (DGT) ruled that it must be taxed under the deceased's IRPF for the year it becomes due, and under Inheritance Tax for the heir.

The question raised

Whether the amounts received must be declared in Inheritance and Gift Tax or in the Personal Income Tax of the deceased or the heir, and, where applicable, whether they must be attributed to the year 2011 or the year 2012.

The DGT's ruling

Employment income is attributed to the period in which it becomes due to the recipient. If the exigibility occurs in a period subsequent to the performance of the work, the attribution corresponds to said subsequent period. In this case, the remuneration is due in 2012, and therefore is taxed in the deceased's Personal Income Tax for that year. As the heir's right derives from her status as such, the amount must be taxed under Inheritance and Gift Tax.

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