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V0827-21 7 April 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Back pay for professional career progression must be attributed to the year it became due and may qualify for the 30% reduction

A civil servant received in 2020 back pay for professional career progression corresponding to the years 2015-2019. The DGT has determined that these earnings must be attributed to the tax year in which they became due (2019) and that they may benefit from the reduction for income with a generation period exceeding two years.

The question raised

Taxation of the aforementioned back pay in Personal Income Tax (IRPF).

The DGT's ruling

Back pay constitutes employment income that must be attributed to the tax period in which it becomes due, according to the administrative resolution of recognition. If the due date is in 2019 but payment is received in 2020, a supplementary tax return for 2019 must be filed. Likewise, the 30% reduction applies if the generation period exceeds two years and no other similar reductions have been applied in the previous five tax periods.

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