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A former bank employee inquired whether compensation for replacing a life pension supplement with a lump sum payment allows for the application of the reduction under Article 18.2 of the Personal Income Tax Act (LIRPF). The Directorate General for Taxes (DGT) ruled that it is applicable, provided the payment is attributed to a single tax period.
This ruling clarifies that lump-sum compensation for the loss of future pension supplements qualifies for the tax reduction for irregular income, provided the entire amount is taxed within a single tax year.
The tax team reviews your specific situation.
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