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V1485-24 18 June 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Back pay for professional career progression is taxed in the year it becomes due and may qualify for a 30% reduction

A civil servant has enquired about the taxation of back pay for a professional career progression supplement received in 2024, covering a period starting from 2022. The Directorate General for Taxes (DGT) has ruled that such payments are attributed to the tax year in which they become due and may be eligible for the reduction for irregular income.

The question raised

Taxation under Personal Income Tax (IRPF).

The DGT's ruling

Arrears are attributed to the tax period in which they become due, as determined by the administrative resolution recognizing them (in this case, 2024). Since they are attributed to a single period and the generation period exceeds two years, the 30% reduction under Article 18.2 of the Personal Income Tax Law applies. To apply this reduction, similar benefits must not have been applied in the five previous tax periods and the income cannot exceed 300,000 euros per year.

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