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V1333-21 11 May 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Professional career back pay is attributed to the tax year in which the administrative resolution becomes enforceable

A civil servant received professional career back pay in 2020 covering the years 2015 to 2019. The Directorate General of Taxes (DGT) rules that these earnings must be attributed to the tax year in which the administrative resolution for recognition becomes enforceable, and analyses the application of the reduction for irregularity.

The question raised

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

The DGT's ruling

Back pay must be attributed to the tax period in which it becomes enforceable, which is determined by the administrative resolution recognizing the supplement. As the collection occurs in a tax year different from that of its enforceability due to circumstances not attributable to the taxpayer, a supplementary tax return for the previous period must be filed. Furthermore, a 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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