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V1485-17 12 June 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Back pay following a court ruling is attributed to the period of appointment

A taxpayer enquired about when to declare salary arrears received following a court ruling that recognised their right to civil service status. The Directorate General of Taxes (DGT) ruled that such income must be attributed to the period in which the right to receive it becomes enforceable, namely, at the time of appointment.

The question raised

Temporal imputation of the amount of the settlement made in 2016.

The DGT's ruling

When the receipt of income is pending judicial resolution, the amounts are imputed to the tax period in which the resolution becomes final, provided that the requirements for receiving the income are met. In this case, enforceability occurs upon appointment as a civil servant, not with the finality of the judgment. As these are arrears with a generation period exceeding two years, the 30% reduction provided for in Article 18.2 of the Personal Income Tax Law applies.

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