Workers receiving split income cannot apply the 30% reduction

The application of the 30% reduction on employment income with generation periods exceeding two years has been the subject of a recent clarification by the Tax Administration. The criterion focuses on how the taxpayer receives and declares such amounts in their tax return.

What the DGT has ruled

The Dirección General de Tributos (DGT) has determined that, to access the benefit provided for in Article 18.2 of the IRPF Law, it is an indispensable requirement that the income be imputed in a single tax period. In the case analyzed, the taxpayer intended to apply the reduction to an amount that was received in installments over several tax years.

The binding body concludes that if the income is received in a fragmented manner, the requirement of single imputation required by the regulations is not met. Consequently, the 30% reduction is not applicable, regardless of whether similar benefits have been applied in previous years for other concepts.

What this means for you

If you are a worker receiving compensation or income whose generation period exceeds two years, you must take special care with the payment structure. The regulations not only require that the right to the income has been generated over a prolonged period, but also that the economic receipt must be concentrated in a single fiscal year to benefit from the reduction.

This criterion limits the possibility of splitting the collection of special incentives or compensations to attempt to mitigate the tax burden through the 30% reduction. If payments are distributed across different years, the Administration considers that the condition of single imputation necessary for this tax treatment is not being met.

What you should do

In situations involving compensation with long generation periods, it is necessary to analyze the payment schedule. The way collections are agreed upon will determine the possibility of applying the reduction from Article 18.2 of the LIRPF. It is recommended to evaluate the payment structure to ensure compliance with the requirements of the IRPF Law and the IRPF Regulation, thereby avoiding possible requests from the Tax Agency due to the improper application of this benefit.