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V1144-24 23 May 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Back pay for professional career increments is taxed in the year the right is recognised and may qualify for a 30% reduction

A nurse enquires about the taxation of back pay for professional career supplements covering the years 2020 to 2023. The DGT rules that these amounts must be attributed in full to 2023, the year the administrative resolution makes the right enforceable, and that they may be eligible for the reduction for irregular income.

The question raised

Personal Income Tax treatment of the aforementioned back payments.

The DGT's ruling

The professional career supplement is income from employment. As it derives from an administrative resolution rather than a judicial sentence, the temporal imputation is carried out in the tax period in which the income is due, namely, 2023. If the generation period exceeds two years and is imputed in a single period, the 30% reduction provided for in Article 18.2 of the Personal Income Tax Law may be applied, provided that said reduction has not been applied in the previous five periods.

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