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V1898-17 18 July 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

The refund of Social Security contributions is not taxed in the year of reimbursement, but in the year of the expense

An entity inquired whether the reimbursement of Social Security contributions unduly deducted from employees affected the Personal Income Tax (IRPF) return for the year in which they were refunded. The DGT responds that the impact must be attributed to the year in which they were included as a deductible expense.

The question raised

Question raised: Impact of the refund on the IRPF taxation of employees and on Form 190 and on the certificate of withholdings and payments on account of Personal Income Tax.

The DGT's ruling

The reimbursement of amounts unduly deducted has no impact on the IRPF return for the year in which the refund is made. Since they were deductible at the time, the impact must occur in the tax assessment of the year in which they were included as an expense. This requires the submission of a supplementary return for Form 190 and the rectification of the deductible expenses for the corresponding year through a supplementary or substitute return.

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