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An employee received compensation following an agreement with their company to dismiss a criminal complaint. The Directorate General of Taxes (DGT) has ruled that this amount constitutes employment income and does not qualify for the redundancy exemption or the reduction for irregularity in timing.
This ruling clarifies that settlements reached to resolve criminal proceedings against an employee are treated as standard employment income for tax purposes, preventing taxpayers from applying specific tax relief intended for redundancies.
The tax team reviews your specific situation.
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