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New guides on the latest Spanish tax and immigration developments.
Practical tools for informed decision-making.
A worker enquired whether, following re-employment, a company should withhold Income Tax (IRPF) on a redundancy payment previously received and exempt. The Directorate General for Taxes (DGT) ruled that the new employment contract does not alter the initial exemption, although unemployment benefits remain taxable.
This ruling clarifies that the tax-exempt status of a redundancy payment is preserved even if the individual is subsequently rehired by the same employer, preventing double taxation or incorrect withholdings.
The tax team reviews your specific situation.
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