Participation in selection boards will be taxed as employment income

The nature of payments received for participating in selection boards has been clarified by the Tax Administration. The classification of this income is decisive in determining the tax treatment and the withholding rate that must be applied at the time of payment.

What the DGT has ruled

The Dirección General de Tributos (DGT) establishes that participation in selection boards derives from the employment or statutory relationship that personnel maintain with the Administration. For this reason, this income must be classified as employment income under Personal Income Tax (IRPF).

Regarding the application of withholdings, the criteria state the following:

• The general withholding rate will apply in accordance with the provisions of Article 82 of the Personal Income Tax Regulations.
• If the position of board member is held for a period of less than one year, the minimum withholding rate of 2 percent will apply.
• In the event that payments are made for arrears from previous years, a withholding rate of 15 percent will apply.

What this means for you

If you maintain an employment or statutory relationship with the Administration and participate in selection processes, you should consider that this income is not of a different nature from your usual salary. This implies that it will be included in your taxable base as employment income and will be subject to the corresponding withholding based on the duration of your activity on the board and the timing of the payments.

What you should do

It is necessary to verify the correct application of withholding rates on the payslips or withholding certificates issued by the Administration. Since the withholding depends on whether the activity lasts less than a year or if it involves retroactive payments, precision in calculation is fundamental to avoid discrepancies in the annual IRPF tax return. It is recommended to assess each particular situation to ensure that the tax treatment complies with current regulations.