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V1545-20 22 May 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos de actividades económicas

Timing of recognition for economic activity income depends on instalment sales or accrual basis

The taxpayer asks whether income received in 2019, relating to a 2012 invoice, should be recognised in the 2019 financial year. The DGT explains that timing depends on whether the accrual principle applies or if the transaction qualifies as an instalment sale or a deferred payment.

The question raised

Whether said income must be imputed to the 2019 fiscal year.

The DGT's ruling

Income from economic activities is imputed according to Corporate Tax regulations. As a general rule, the accrual principle applies, but in installment transactions or those with deferred pricing (where the period between accrual and maturity exceeds one year), income is understood to be obtained based on the enforceability of collections, unless the accrual method is elected. For transactions carried out before 2015, the integration of pending income follows the tax regime applicable at the time of the transaction.

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