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V2869-23 25 October 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Delay compensation in workplace transfers does not qualify for the 30 per cent reduction

A worker inquired whether monthly compensation received due to a company's delay in implementing a job transfer could be classified as income obtained in a notoriously irregular manner. The Directorate General for Taxes (DGT) ruled that while these amounts constitute employment income, they do not meet the requirements to apply the 30 per cent reduction.

The question raised

Whether the amount accrued monthly until the relocation becomes effective is subject to taxation under Personal Income Tax (IRPF) and, if so, whether it could be considered as employment income obtained in a notoriously irregular manner over time according to Article 12 of the Regulations of the aforementioned tax.

The DGT's ruling

Compensation for delays in relocation constitutes employment income pursuant to Article 17 of the Personal Income Tax Law (LIRPF). The 30 percent reduction provided for in Article 18.2 does not apply because there is no generation period exceeding two years. Furthermore, these amounts do not qualify as income obtained in a notoriously irregular manner over time, as Article 12.1 of the Personal Income Tax Regulations (RIRPF) refers to amounts related to the relocation itself and not to delay compensation stipulated in collective bargaining agreements.

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