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V5307-16 15 December 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · imputación temporal

Wage arrears following court rulings must be attributed to the financial year in which the decision becomes final

A worker requested clarification regarding the temporal attribution of salary differences recognised via court ruling versus municipal decree. The DGT ruled that amounts awarded by court ruling must be attributed to the year the decision becomes final, whereas those recognised by decree follow the general rule of enforceability.

The question raised

Temporal imputation in Personal Income Tax (IRPF).

The DGT's ruling

Income from employment pending judicial resolution is imputed to the tax period in which the judgment becomes final. If payment is made in installments due to causes not attributable to the taxpayer, supplementary tax returns must be filed without penalties or interest. Arrears covering a generation period exceeding two years may qualify for the 40 percent reduction if they are not periodic or recurring.

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