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V1175-21 29 April 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Back pay for professional career progression is imputed to the period of its enforceability and may qualify for the 30% reduction

A civil servant asks how to tax back pay for professional career progression received in 2020 that corresponds to the years 2012-2019. The DGT responds that it must be imputed to the period in which it became enforceable by administrative resolution and that the reduction for income with a generation period exceeding two years may apply.

The question raised

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

The DGT's ruling

Back pay must be imputed to the tax period in which it becomes enforceable, as determined by the administrative resolution of recognition. If it is received in a period different from its enforceability due to circumstances not attributable to the taxpayer, it is imputed to the previous period through a supplementary tax return. Likewise, the 30% reduction is applicable if the generation period exceeds two years and no other similar reductions have been applied in the previous five periods.

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