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V1647-24 8 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% reduction applicable to income generated over a period exceeding two years

A taxpayer has queried whether backdated payments of their 'complemento de destino', recognised by a court, allow for the application of the reduction provided in Article 18.2 of the Personal Income Tax Act (LIRPF). The Directorate General for Taxes (DGT) has ruled that, as the payments relate to the same remunerative concept and cover a period of more than two years, the reduction is applicable.

The question raised

Personal Income Tax (IRPF) taxation: application of the reduction under Article 18.2 of Law 35/2006.

The DGT's ruling

Back pay for destination supplements derived from orders extending effects allows for the 30% reduction if the generation period exceeds two years. Although they originate from two different resolutions, as they pertain to the same remunerative concept and are imputed to the same tax period, the total temporal span is computed. The application is conditional upon not having applied said reduction to other similar earnings in the five previous tax periods.

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