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V2357-20 10 July 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% reduction not applicable for salary differences with a generation period of less than two years

A taxpayer inquired whether they could apply the 30% reduction on employment income when receiving unpaid wages resulting from an illegal wage freeze. The Directorate General for Taxes (DGT) ruled that the reduction does not apply because the generation period is less than two years.

The question raised

Application of the reduction provided for in Article 18.2 of the Personal Income Tax Law to the aforementioned salary difference payments.

The DGT's ruling

Income recognized by judicial sentence is imputed to the period in which the resolution becomes final. The 30% reduction provided in Article 18.2 of the LIRPF is not applicable because the period of generation of the income is less than two years. Salary differences subsequent to the sentence are imputed to the period in which they become due and also do not benefit from said reduction.

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