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V2922-20 29 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Income tax withholding required for salary or severance payments, but not for FOGASA reimbursements

A company in liquidation has requested clarification on whether it must withhold income tax (IRPF) when paying salaries and when reimbursing amounts to FOGASA. The Directorate General for Taxes (DGT) has ruled that withholding is mandatory when paying employment income, but not when making the reimbursement to the Fund.

The question raised

Obligation to apply withholdings on account of IRPF on the amounts paid to workers and the amounts reimbursed to the Wage Guarantee Fund.

The DGT's ruling

The entity and FOGASA are obliged to apply IRPF withholdings at the time they satisfy income from employment subject to this obligation. However, the amount reimbursed by the entity to FOGASA is not subject to the obligation to effect withholdings on account of IRPF.

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