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A local council has requested clarification on whether early retirement incentives and ordinary retirement bonuses qualify for the 30% reduction under Article 18.2 of the Personal Income Tax Law (LIRPF). The Directorate General for Taxes (DGT) states that this is possible provided that specific requirements regarding length of service and the duration of the agreement are satisfied.
This ruling provides legal certainty for employers and employees regarding the tax treatment of retirement-related payments, potentially reducing the tax burden for those meeting the criteria.
The tax team reviews your specific situation.
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