Skip to content
Back to index
V2305-14 8 September 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · salarios de tramitación

Processing wages are considered employment income and subject to general withholding rates, not arrears rates

A query was raised regarding whether wages resulting from legal proceedings following a court ruling should be subject to IRPF withholding and which rate should apply. The DGT ruled that these constitute employment income and that withholding must follow the general procedure rather than the fixed rate applied to arrears.

The question raised

A consultation is made regarding the application of personal income tax withholdings to processing wages paid, the confirmation of the applied criterion, or the impropriety of applying withholdings to processing wages when the Labor Court judgment refers to gross wages.

The DGT's ruling

Processing wages are considered income from employment and are attributed to the tax period in which the judgment becomes final. The obligation to withhold arises at the time of payment. The withholding rate must be determined through the general procedure and not through the fixed 15% rate for arrears, as these wages do not constitute arrears.

Book your free first meeting