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A taxpayer with contributions made prior to 2007 sought clarification on the deadline for applying the 40% tax reduction following a collective redundancy. The Directorate General of Taxes (DGT) ruled that if retirement benefits are collected early due to redundancy, the contingency occurs at that moment, and the deadline for the reduction expires within the following two tax years.
This ruling clarifies the specific timeframe for exercising tax benefits on older pension contributions when redundancy triggers early collection, impacting tax planning for employees affected by collective dismissals.
The tax team reviews your specific situation.
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