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V1848-21 14 June 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Professional career back pay is imputed to the year in which it becomes due and may qualify for the 30% reduction

A civil servant received in 2020 back pay for professional career progression corresponding to 2015, 2016, and 2017. The DGT determines that these earnings must be imputed to the tax year in which they became due by administrative resolution and analyzes whether the reduction for irregularity is applicable.

The question raised

Taxation under Personal Income Tax (IRPF).

The DGT's ruling

Back pay is considered employment income and must be imputed to the tax period in which it becomes due, which in this case is the year of the administrative resolution of recognition. The 30% reduction is applicable if there is a generation period exceeding two years, calculated from date to date between the economic effects and the resolution, provided that no other similar reductions have been applied in the previous five periods.

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