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V1083-19 21 May 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Court-ordered payments are taxed in the year the ruling becomes final

A civil servant has filed a legal claim for retroactive payments dating back to 2007. The Directorate General of Taxes (DGT) has ruled that such income must be taxed in the year the judicial decision recognising the right becomes final.

The question raised

Temporal attribution in Personal Income Tax.

The DGT's ruling

When the right to income is pending judicial resolution, the amounts shall be attributed to the tax period in which the resolution becomes final. In this case, the remuneration must be attributed to the 2018 fiscal year. As these are incomes with a generation period exceeding two years that are attributed to a single period, the 30% reduction provided for in Article 18.2 of the Personal Income Tax Law applies.

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