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V1539-17 ·16 June 2017 ·consulta-vinculante Medium impact
Tax

Severance pay may lose tax exemption if services are resumed with the same company within three years

A worker received redundancy pay following a collective dismissal and, within three years, began providing services to the same company as a freelancer. The Directorate-General for Taxes (DGT) indicates that this creates a presumption that there was no real and effective severance of the employment relationship.

In 6 key points

How it affects those involved

This ruling affects the tax treatment of redundancy payments, as re-engaging with the same employer shortly after dismissal may disqualify the tax exemption previously applied to the severance.

Lifecycle

2017-06-16PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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