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V3270-23 19 December 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · retención

Employers may not pass on uncollected income tax withholdings to employees

A query was raised regarding whether a company can reclaim from its employees the income tax (IRPF) withholdings that the Tax Agency has subsequently demanded from the employer. The Directorate General for Taxes (DGT) ruled that there is no legal basis to deduct these amounts from salaries or to claim them from employees.

The question raised

Possibility of passing on to workers the withholdings claimed from the employer by the Tax Agency.

The DGT's ruling

Failure to comply with the obligation to withhold or remit amounts correctly does not allow, within the tax sphere, for deductions from workers' income nor for claiming the unwithheld amounts from them. Article 99 of Law 35/2006 establishes that the recipient shall deduct from their tax liability what should have been withheld if the failure to withhold is attributable to the withholding agent. Nevertheless, the DGT indicates that this does not exclude other avenues of compensation outside the strictly tax-related sphere.

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