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V2565-17 10 October 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Relocation allowances do not qualify for the 30% reduction if received over multiple years

A query was raised regarding whether compensation and allowances for workplace relocation are eligible for the reduction applicable to irregular income. The Directorate General for Taxes (DGT) ruled that this is not possible if the amounts are attributed to more than one tax period.

The question raised

Tax treatment of compensation derived from a change of workplace, and the application of the reduction provided for in Article 18.2 of the Personal Income Tax Law.

The DGT's ruling

Relocation amounts constitute employment income. To apply the 30% reduction for notoriously irregular income, the amounts must be attributed to a single tax period. As the housing allowance is received in installments over three years, this requirement of single attribution is not met.

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