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A company has requested clarification on whether financial compensation for a post-contractual non-compete agreement qualifies for the 30% reduction under Article 18.2 of the Personal Income Tax Act (LIRPF). The Directorate-General for Tax (DGT) has ruled that it is not applicable because there is no generation period exceeding two years.
This ruling clarifies that non-compete payments do not automatically qualify for the tax reduction for irregular income unless they meet the specific duration requirements set out in the tax law.
The tax team reviews your specific situation.
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