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V1051-22 10 May 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% reduction for back pay may apply where the generation period exceeds two years

A civil servant enquired whether professional career back pay received in 2021, relating to the years 2015-2020, qualified for the reduction under Article 18.2 of the LIRPF. The DGT has ruled that temporal imputation corresponds to the year in which the administrative resolution of recognition was issued.

The question raised

Taxation of the aforementioned arrears in Personal Income Tax (IRPF): application of the reduction under Article 18.2 of Law 35/2006.

The DGT's ruling

Arrears are attributed to the tax period in which they become due, as determined by the administrative resolution of recognition. The 30% reduction is applicable if there is a generation period exceeding two years and provided that no other reductions for this same concept have been applied in the five previous tax periods. The amount to which the reduction is applied may not exceed 300,000 euros per year.

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