Geographical mobility: deduction applicable in the year of relocation and the following year

The Directorate General of Taxes (DGT) has issued a relevant ruling regarding the application of the deductible expense increase for geographical mobility in Personal Income Tax (IRPF). The inquiry analyzes the possibility of applying this tax benefit both in the fiscal year in which the relocation occurs and in the immediately following fiscal year.

What the DGT has ruled

The body establishes that, to access this expense increase, specific requirements of causality and formality must be met. The taxpayer must be registered with the employment office, and the new job position must mandatorily require a change of habitual residence. It is fundamental that a direct relationship exists between the acceptance of the employment and the change of domicile; an excessive time interval between both events could be interpreted as an indication of a lack of causality.

Regarding timing, the DGT clarifies that the right to this increase applies in the tax period in which the change of residence is made and in the following one. Likewise, it is specified that the duration of the employment contract does not limit the application of this tax benefit.

What it means for you

If you have had to change your habitual residence to accept a new job, this ruling confirms that you have two tax periods to apply the deduction. This represents an advantage for the taxpayer's tax planning, as the benefit is not exhausted in the same year as the relocation. However, the key lies in proving the necessity of the change of residence and the prior registration with the employment service, elements that the Administration will verify rigorously.

What you should do

It is necessary to document the causal relationship between the new employment contract and the change of domicile. You must verify that the registration with the employment office is effective and that the job position formally requires the relocation. Since the interpretation of causality may depend on specific facts, it is fundamental to assess each particular situation to ensure that all requirements of the IRPF Law and its Regulations are met.