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A retiree receives an out-of-court settlement to compensate for a lower pension caused by errors in their former company's social security contributions. The Directorate General of Taxes (DGT) has ruled that this payment does not allow for the application of the 30% reduction provided for in the Personal Income Tax (IRPF) Law.
This ruling limits the tax benefits available for lump-sum settlements intended to rectify pension discrepancies, as they may not meet the criteria for irregular income.
The tax team reviews your specific situation.
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