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V1608-19 27 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

30% tax reduction applicable to employment income with a generation period exceeding two years

A worker inquired about the taxation of a salary supplement received following a court ruling covering several years. The Directorate General of Taxes (DGT) ruled that the income must be attributed to the year the judgment becomes final and that the reduction for irregular income may be applied.

The question raised

Taxation under Personal Income Tax (IRPF).

The DGT's ruling

Amounts for supplementary remuneration pending judicial resolution are imputed to the tax period in which the judgment becomes final. If the accumulated amount has a generation period exceeding two years and is imputed in a single period, the 30% reduction provided for in Article 18.2 of the Personal Income Tax Law applies. To this end, this reduction must not have been applied to other similar income in the previous five tax periods and the amount must not exceed 300,000 euros per year.

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