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A query was raised regarding whether income tax withholding should be applied to the extraordinary payments of a retirement pension. The Directorate General for Taxes (DGT) ruled that when calculating the total amount of remuneration, both fixed and predictable variable payments, including extraordinary payments, must be included.
Pensioners must account for extraordinary payments when calculating their total annual income for income tax withholding purposes, as these are considered part of the total remuneration.
The tax team reviews your specific situation.
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