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A query was raised regarding whether severance payments made to senior management due to the termination of their contract via employer withdrawal are exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) has ruled that these earnings are subject to tax.
This ruling clarifies that senior executives cannot claim tax exemptions on severance packages resulting from employer-led contract terminations, ensuring these payments are taxed as standard income.
The tax team reviews your specific situation.
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