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A retiree inquired whether the 40% reduction could be applied when withdrawing a pension plan as a lump sum, involving contributions made prior to 2007. The Directorate General for Taxes (DGT) explained that this is possible subject to specific timeframes and withdrawal methods, while clarifying that the 30% reduction under Article 18 cannot be applied.
This clarification provides certainty for retirees regarding the tax benefits available when withdrawing pension funds, specifically distinguishing between the different reduction regimes based on the timing of contributions.
The tax team reviews your specific situation.
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