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A worker inquired whether compensation received for reducing their working hours to 50% was exempt or eligible for the irregular income reduction. The Directorate General for Taxes (DGT) ruled that these amounts are taxed as employment income and do not qualify for the requested exemptions or reductions.
This ruling clarifies that compensation for voluntary working hour reductions is treated as standard employment income, preventing taxpayers from applying tax exemptions or irregular income relief to such payments.
The tax team reviews your specific situation.
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