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A query was raised regarding whether the economic incentive for delaying retirement (paid as a lump sum or mixed payment) allows for Personal Income Tax (IRPF) reductions. The Directorate General for Taxes (DGT) has ruled that, as these are classified as income from employment, the 30% reduction for lump-sum payments applies.
Taxpayers delaying their retirement may benefit from a significant tax reduction on the incentive payment, provided it is structured as a lump sum or mixed payment rather than a regular pension stream.
The tax team reviews your specific situation.
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