Taxpayers have until the end of December to file amended returns, without incurring penalties, to report retrospective amounts of wages and pensions received through 2023.

This obligation mainly applies to employees in the private sector, pensioners, doctors in the NHS who receive fees from hospital evening practices, and other categories of taxpayers.

These amounts, regardless of the year to which they relate, must be declared by filing amendment returns.

The tax resulting from the new settlement must either be paid in a lump sum by January 31, 2025, or be placed in a fixed arrangement for repayment in installments.

The amendment return must be filed separately for each year to which the retroactive payments relate. The taxpayer must log in to their account on the myAADE digital portal and select the year to which the amounts received in 2023 relate.

For example, if the retrospective payments relate to the tax year 2020, then the year of filing will be 2021. After the amended return is filed, a new return is issued that calculates the tax due.

According to the legislation, no penalties and interest will be imposed on amending returns submitted for income from retroactive salaries, pensions, unemployment benefits or NHS doctors’ fees, provided that such returns are submitted by the end of the tax year in which the relevant income statements were issued.

Particular care should be taken by the heirs of taxpayers who pass away within 2023. By the end of the year, heirs are required to file tax returns for decedents. To complete the process, heirs must declare their status as next of kin and inform the IRS Registry. The declaration is then submitted electronically through the AADE platform under the “Requests” section.

In addition, taxpayers who transferred their tax residence abroad in the previous year are required to submit their tax return by 31 December 2024.

With regard to the declaration of retroactive amounts, these will automatically appear pre-filled in the corresponding codes of the return and no other codes can be modified. If the taxpayer wishes to amend items that do not relate to the retroactive amounts, he/she must submit a separate amendment return for the remaining items.