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V1029-21 20 April 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Backdated professional career allowances must be attributed to the year they became due and may qualify for the 30% reduction

A civil servant inquired about the taxation of backdated professional career allowances received in 2020 for previous periods. The Directorate General for Taxes (DGT) ruled that these must be attributed to the year in which the administrative resolution made them due, and that they may benefit from the reduction for irregular income if legal requirements are met.

The question raised

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

The DGT's ruling

Arrears are considered income from employment and must be attributed to the tax period in which they become due, according to the administrative resolution that recognizes them. For arrears spanning the period between the commencement of their economic effects and the resolution, the 30% reduction is applicable for having a generation period exceeding two years, provided that no other similar reductions have been applied in the previous five tax periods. Arrears subsequent to the date of the resolution are attributed to the year in which they became due.

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