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A taxpayer inquired about the deadline to apply the 40% reduction on contributions made prior to 2007 following a collective redundancy. The Directorate General of Taxes (DGT) ruled that if the benefit is claimed early due to redundancy, the contingency occurs at that moment, and the deadline for the reduction is calculated from that financial year.
This ruling clarifies the timing for applying tax reductions on legacy pension contributions when benefits are triggered by early retirement or redundancy, affecting tax planning for employees facing job loss.
The tax team reviews your specific situation.
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