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V2850-18 30 October 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Income from professional services with deferred pricing is recognised when payments become due

A lawyer seeks clarification on when to tax fees for services rendered in previous years that are collected following judicial action. The DGT rules that, as the cash basis of accounting was not chosen, the Corporate Tax rules for instalment sales apply.

The question raised

1st) Temporal imputation of the aforementioned income.

The DGT's ruling

For installment operations or those with deferred pricing, the general rule is the imputation of income proportionally as the collections become due. Since neither the accrual basis nor the cash basis has been selected, fees must be taxed in the periods in which the collections are due. Remuneratory interest is taxed as income from movable capital or professional activity, whereas compensatory interest is taxed as a capital gain.

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