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V0919-21 14 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 is attributed to the period it becomes due and may qualify for the 30% reduction

A civil servant inquired about the taxation of back pay for professional career progression received in 2020, covering the period from 2015 to 2020. The Directorate General for Taxes (DGT) ruled that such payments must be attributed to the period in which they became due according to the administrative resolution, and that they may qualify for the reduction applicable to income with a generation period exceeding two years.

The question raised

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

The DGT's ruling

Arrears are considered income from employment, and their temporal imputation is made to the tax period in which they become due, as determined by the administrative resolution of recognition. For income attributable to 2019 received in 2020, the rule of imputation to the period of due date applies through a supplementary self-assessment. The 30% reduction for a generation period exceeding two years is applicable to arrears spanning from the initial date to the administrative recognition, provided that no other similar reductions have been applied in the previous five periods.

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