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V2634-18 1 October 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Salary arrears from court rulings are attributed to the tax year in which the judgment becomes final

A group of workers received payments in 2018 for salary differences spanning 2014 to 2017 following a court ruling. The DGT has determined that these earnings must be taxed in the year the judgment became final, and that the reduction for irregular income applies.

The question raised

Taxation of paid salary differences and the applicable withholding rate.

The DGT's ruling

Income from employment pending judicial resolution is attributed to the tax period in which the judgment becomes final. As it has a generation period exceeding two years and is attributed to a single fiscal year, the 30 percent reduction provided in Article 18.2 of the LIRPF is applicable. Withholdings are attributed to the tax year and, as they are payments from previous fiscal years, the applicable rate is 15 percent.

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