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A query was raised regarding whether redundancy pay remains exempt from Income Tax (IRPF) if the worker continues to work for a related company. The Directorate General for Taxes (DGT) indicates that maintaining a relationship with a related entity triggers a presumption that there has been no real termination of employment, although this presumption can be rebutted with evidence to the contrary.
This ruling clarifies the tax implications for redundancy payments when workers transition to related companies, placing the burden of proof on the taxpayer to demonstrate a genuine severance of the employment relationship.
The tax team reviews your specific situation.
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