Skip to content
Back to index
V1525-19 24 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Salary arrears are taxed in the year a court ruling becomes final and may be eligible for a reduction

A taxpayer inquired about the taxation of salary differences from previous years and the procedural interest arising from a judicial settlement. The DGT ruled that arrears must be attributed to the tax year in which the ruling becomes final, and that procedural interest is taxed as capital gains within the savings tax base.

The question raised

Temporal attribution and application of the reduction provided for in Article 18.2 of the Tax Law. Taxation of procedural interest.

The DGT's ruling

Employment income pending judicial resolution is attributed to the tax period in which the resolution becomes final. If the generation period exceeds two years, a 30% reduction may be applied under certain limits and conditions. Procedural interest of a compensatory nature is taxed as capital gains integrated into the savings tax base.

Book your free first meeting