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A taxpayer inquired about the taxation of a partial surrender of a life insurance policy contracted in 1997 and whether a tax reduction could be applied. The Directorate General of Taxes (DGT) ruled that, as no premiums were paid prior to 1994, the reduction provided for in the fourth transitional provision does not apply.
Taxpayers seeking to apply specific life insurance tax reductions must ensure that a portion of the premiums was paid before 1994 to qualify under the transitional provisions.
The tax team reviews your specific situation.
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