Ingreso a cuenta repercutido (passed-on payment on account)

The rule is in art. 43.2 LIRPF: the payment on account is added to the value of the income in kind «unless its amount has been passed on to the recipient of the income». If the company bears it, the employee declares value plus payment on account and deducts that payment as if it were a retención; if it is passed on (deducted from the payslip), the employee declares only the value and still deducts the payment on account, which came out of their own pocket.

The amount is calculated by applying to the value of the benefit the same rate as to cash pay (art. 102 RIRPF), and the payer reports it together with the quarter's withholdings on modelo 111 and on the annual summary modelo 190. If you are an autónomo and a client pays you in kind, their payment on account works for you like any withholding: you subtract it in your income tax return.

The typical mistake in a small SL is giving an employee a company car or housing and not calculating the payment on account: the payslip looks right, but modelo 111 falls short and the gap surfaces in a tax review.

Related terms

• Autónomo: An autónomo is a self-employed individual who works independently in Spain and bears the financial risk of their own business.
• Retención: Retención is the portion of an invoice or payslip that the payer withholds and pays directly to the tax agency on account of the recipient's income tax.
• Modelo 111: Modelo 111 is the quarterly return for IRPF (personal income tax) withholdings applied to employees' payroll, to professionals who issue invoices with withholding, and to other recipients.
• Modelo 190: Modelo 190 is the annual summary of Modelo 111, listing by recipient all the IRPF withholdings applied during the year to payroll and professional invoices.

Full glossary