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A worker inquired whether their severance pay would retain its Personal Income Tax (IRPF) exemption after receiving a new proposal from their former employer. The Directorate General for Taxes (DGT) explains that returning to work for the same company, or an affiliated one, within three years creates a presumption that no real termination of the employment relationship occurred.
This ruling affects the tax treatment of severance payments for employees who return to their former employer or group within a three-year period, potentially leading to the loss of tax exemptions if the termination is deemed not to have been genuine.
The tax team reviews your specific situation.
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