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V0736-22 5 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos netos

30% reduction for income generated over more than two years applicable if not habitual

A lawyer inquired whether the 30% reduction under Article 32.1 of the Personal Income Tax Act (LIRPF) could be applied to fees received in 2021 for legal defence work initiated years prior. The Directorate General for Taxes (DGT) ruled that it is applicable provided the payment is an isolated occurrence and not part of a professional activity where such income is obtained regularly or habitually.

The question raised

Application of the 30 percent reduction under Article 32.1 of Law 35/2006 to the fees received by the applicant in 2021.

The DGT's ruling

The income of a lawyer for procedural defense in litigation lasting more than two years is considered to be generated over a period exceeding two years. The 30% reduction is applicable provided that the professional does not obtain this type of income on a regular or habitual basis in their economic activity. Habituality must be assessed based on the individual income of the taxpayer and not on the legal profession in the abstract. The burden of proof regarding habituality lies with the Administration.

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