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V0624-16 16 February 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Back pay from court rulings is attributed to the year the judgment becomes final

A trainee civil servant asks how to tax back pay received in 2015 following a 2013 ruling covering the 2008-2014 period. The DGT rules that amounts up to the ruling are attributed to the year the judgment becomes final, while subsequent amounts are attributed to the year they are received.

The question raised

Taxation for Personal Income Tax purposes of the amounts received.

The DGT's ruling

Income from employment pending judicial resolution is attributed to the tax period in which the judgment becomes final. If this income spans more than two years, the 40% reduction for a generation period exceeding two years is applied. Income accrued from the judgment until payment is attributed to the period in which it becomes due, without entitlement to said reduction.

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