The rules of temporal imputation
As we know, during the months of May and June of each year, we must
file the Personal Income Tax return and declare the
income we have received during the previous year (art. 96 LIRPF).
Now then:
When is it understood that we have received income in a given tax year?
To answer this question we have to consider the type of income, with
general rules and, in certain cases, special rules.
A. General rule (art. 14.1 LIRPF):
1. Income from work and income from capital must be imputed, not in the
year in which it is collected, but in the year in which it is due to the recipient
(accrual criterion).
Therefore, the landlord who has agreed to receive his rent at the beginning of each month and
receives the rent for December 2015 in mid-January 2016, must
allocate it to the 2015 fiscal year.
2. Income from economic activities is attributed according to the Corporate Income Tax regulations ; however, we may opt for the cash basis method if we meet the requirements of Article 7 of the Personal Income Tax Regulations . Therefore, we must again, and essentially, adhere to the accrual principle .
3. Income derived from capital gains and losses must be
attributed to the financial year in which the change in net worth occurs.
B. Special rules of imputation. These include, among others, the following:
– Capital gains that cannot be justified must be attributed to the period in which they were discovered by the Tax Authorities. – When income has not been paid because it is pending judicial resolution , it will be attributed to the tax year in which said resolution becomes final. – Salary arrears must be declared when received, although they will be attributed to the tax year in which they become due, through a supplementary tax return. – Public subsidies are attributed to the year in which they are received. – In installment transactions where the price is received through successive payments over a period exceeding one year from the date of delivery or making available, the taxpayer may choose to attribute the income as the payments become due. – Since January 1, 2015, losses from uncollectible debts have been subject to specific regulations, specifically Article 14.2 of the Personal Income Tax Law (LIRPF), in situations involving debt forgiveness or legal claims.
When dealing with your income tax, seek the security of an expert in the field.
At Àmbit Assessor we are experts in national and international taxation and we would be
happy to help you.
Contact us via email at ambit@ambitassessor.com or
at our offices.
Marc Ivars,
Tax Area
Àmbit Assesor
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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