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V1817-24 19 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Wage differences from court rulings are attributed to the tax year in which the judgment becomes final

A query was raised regarding when judicially recognised wage differences should be taxed and which withholding rate should be applied. The DGT establishes that these earnings are attributed to the period in which the court ruling becomes final.

The question raised

Subject to withholding tax under Personal Income Tax (IRPF) regarding employment income to be paid to a former employee, corresponding to wage differences (for the period from 1 April 2018 to 30 March 2019) established by judicial judgment.

The DGT's ruling

Income from employment arising from wage differences pending judicial resolution shall be attributed to the tax period in which the judgment becomes final. The withholding rate shall be determined according to the general procedure of the Personal Income Tax Regulations. If the payment is made in a period subsequent to that of the temporal attribution, the fixed rate of 15% for arrears shall apply.

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