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V3084-23 24 November 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Professional income is recognised on an accrual basis or via the cash basis

A lawyer has requested clarification regarding the timing of income recognition for professional activities. The Directorate General for Taxes (DGT) has ruled that income shall be recognised on an accrual basis or, should the taxpayer opt for it, on a cash basis.

The question raised

Temporal imputation in Personal Income Tax (IRPF) of income from the activity.

The DGT's ruling

The temporal imputation of income from economic activities is carried out in accordance with Corporate Tax regulations. As a general rule, the accrual basis is applied, imputing income and expenses to the period in which they occur according to accounting standards. However, taxpayers who meet certain accounting requirements may opt for the cash basis. Regarding funds, payments for services rendered are considered income from the activity, whereas disbursements are not.

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