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V0628-15 20 February 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Income from employment pending judicial resolution is imputed to the tax year in which the judgment becomes final

A company must refund reduced salaries following a judicial ruling that annulled said reduction. The DGT clarifies that these amounts are imputed to the year in which the judgment becomes final and specifies how withholdings and the taxation of interest must be calculated.

The question raised

Withholding to be applied.

The DGT's ruling

Income from employment pending judicial resolution is imputed to the tax period in which the judgment becomes final. If received in subsequent tax years, supplementary tax returns shall be filed without penalties or late payment interest. For arrears received in tax years other than the year of their imputation, a withholding rate of 15% shall apply. Compensatory interest derived from the judgment is taxed as capital gains and is not subject to withholding.

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