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V1788-22 27 July 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Arrears in temporary disability benefits from previous years are subject to 15% withholding and excluded from the withholding rate base

A worker sought clarification on the tax treatment of temporary disability (IT) benefit arrears from 2021, paid in 2022 following an INSS resolution. The DGT clarifies that these amounts constitute arrears attributed to the previous tax year and must be subject to a specific withholding rate.

The question raised

Whether the tax treatment applied by your company in 2022, regarding the calculation of the withholding tax rate for the receipt of arrears from 2021 temporary disability benefits, is correct, and what the correct withholding tax rate should have been applied in 2022.

The DGT's ruling

Differences in temporary disability benefits for 2021 paid in 2022 are income from employment attributable to 2021 as they were due in that fiscal year. As they constitute arrears, a withholding tax rate of 15% applies pursuant to Article 80.1.5 of the RIRPF. Furthermore, these arrears must not be included in the base for calculating the withholding tax rate for current benefits in the year they are received.

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