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V1132-24 23 May 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · phantom plan

Phantom plan payments classified as employment income and ineligible for 30% reduction

An executive director sought clarification on the taxation of an amount received from a phantom plan following a liquidity event. The DGT ruled that these payments constitute employment income due in the year of the liquidity event and are not eligible for the reduction for irregular income.

The question raised

Taxation of the amount received by the applicant in 2023.

The DGT's ruling

Remuneration for directors and board members constitutes income from employment. The amount of a phantom plan is exigible when the liquidity event occurs, and must be attributed to the tax period in which this takes place. The 30% reduction provided for in Article 18.2 of the Personal Income Tax Law (LIRPF) is not applicable because the amounts are not considered income obtained in a notoriously irregular manner, nor do they meet a generation period exceeding two years.

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