Salary increases under collective agreements will be taxed in the year they become due

Determining the exact moment when a salary increase must be taxed in Personal Income Tax (IRPF) is a key aspect of tax planning for workers. A recent binding ruling from the Dirección General de Tributos (DGT) has specified the applicable criterion when increases derive from the application of collective agreements.

What the DGT has resolved

The issue focused on the temporal attribution of income from employment when it arises from the signing of an agreement. The advisory body has established that the attribution of income from employment takes place in the tax period in which it is due to its recipient.

In the analyzed scenario, upon signing an agreement and establishing the payment of increases in a specific year, such amounts are considered due in that same financial year. Therefore, the regulations require that the taxation of those increases corresponds to the tax period in which the worker already has the acquired right to collect, regardless of when the actual cash movement occurs if it were different, although in this case they coincide in the year they become due.

What it means for you

If you are a worker benefiting from the update of salary tables in a collective agreement, you must take into account that you cannot choose the fiscal year in which to declare that income. The date on which the amount becomes due sets the fiscal calendar.

• Temporal attribution: The increase in income must be included in the tax return for the year in which the agreement establishes that the worker has the right to receive it.
• Tax base: This increase will raise the tax base of your return in the corresponding financial year, which could alter the applicable tax rate.
• Legal certainty: The criterion is based on Law 35/2006 on IRPF and Law 58/2003 General Tax Law, ensuring that the income is attributed when the right to collect arises.

What you should do

Upon the application of new collective agreements, it is necessary to verify the date on which the new salaries become due to avoid errors in your tax return. Since this increase will directly impact your annual income, it is advisable to evaluate how it will affect your total tax burden for the year to avoid surprises in the tax settlement. It is recommended to assess each particular situation according to the application calendar of the agreements applicable to your professional sector.