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A property owner sought clarification on whether a €50,000 compensation received for terminating a lease to restore a premises to its original state qualified for the 30% reduction applied to irregular income. The Directorate General of Taxes (DGT) ruled that while the compensation constitutes real estate capital income, the reduction for irregular income does not apply.
This ruling clarifies that compensation received for lease termination is taxable as real estate income but does not meet the specific criteria required to benefit from the tax reduction applicable to notoriously irregular income.
The tax team reviews your specific situation.
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