30% reduction on bonuses: calculating the generation period

The application of the reduction for notoriously irregular income from employment has raised doubts about how to calculate the time required to access the 30% tax benefit. A recent binding ruling from the Dirección General de Tributos (DGT) establishes the rules for determining whether a bonus meets the temporal requirement demanded by Personal Income Tax (IRPF) regulations.

What the DGT has ruled

The ruling focuses on the application of Article 18.2 of Law 35/2006 to the collection of bonuses. The DGT's criteria determine that the bonus is classified as income from employment and, for it to be considered notoriously irregular and allow for the 30% reduction, the work generation period must be longer than two years.

A key point of the resolution is the method for measuring said period. The Administration establishes that:

• The calculation must be carried out according to the time span to which the remunerated work corresponds.
• The time elapsed from when the work is performed until the income is effectively due to the worker must not be included in the calculation.

What it means for you

If you are a worker receiving bonuses or incentives based on tasks performed over several years, this criterion defines your tax burden. The 30% reduction does not depend on when you receive the money in your bank account, but on how much time it took you to perform the functions that originate that payment. If the task execution period is two years or less, you will not be able to apply the reduction, regardless of whether the payment is delayed over time.

What you should do

It is essential to analyze the nature of the incentives and the documentation that proves the task execution period. Since the calculation is based on the work generation time and not on the moment of collection, it is necessary to verify that contracts or bonus agreements clearly specify the period of activity linked to said income. It is recommended to assess each particular situation to ensure that the temporal calculation strictly adheres to what has been dictated by the DGT.