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V5084-16 23 November 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Deferred payments for professional activities are recognised when collections become due

A company has requested clarification on when payments for ancillary benefits (both ordinary and extraordinary) made via deferred payment schemes should be recognised and when tax must be withheld. The Directorate General for Taxes (DGT) ruled that, since the company has not opted for the cash basis (collections and payments), the rules governing instalment transactions apply.

The question raised

Temporal allocation of the amounts corresponding to the ordinary and extraordinary accessory service exceeding those received as down payments during the year, taking into account that the same would be paid in two installments to be made in June and in October/November of the second year following the year of accrual, together with the corresponding market interest. Furthermore, it is inquired when the obligation to withhold would arise on the part of the consulting entity.

The DGT's ruling

For installment operations or those with deferred pricing, the allocation must be made in the period in which the collections become due, unless the taxpayer opts for the accrual basis. Interest for the deferral of the price does not constitute income from movable capital, but rather income from professional activities. Withholding must be applied at the time of the satisfaction or payment of the income, applying the rate corresponding to professional activities.

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