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V0018-18 9 January 2018 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

The 40% reduction for contributions made before 2007 applies to only one lump-sum payment per year

A retiree inquired whether the 40% reduction could be applied to two different amounts received from their pension plan within the same year. The Directorate General of Taxes (DGT) ruled that this reduction can only be applied to a single lump-sum payment received per tax year.

The question raised

Possibility of applying the 40 percent reduction to the two amounts received in the same year, corresponding to contributions made until December 31, 2006.

The DGT's ruling

Pension plan benefits are considered earned income. The 40% reduction for contributions made until December 31, 2006, may only be applied to amounts received as a lump sum within the same tax period, at the taxpayer's discretion. It is not possible to apply this reduction to multiple payments received throughout the same year. The right to apply this transitional regime for contingencies in 2013 extends to benefits received up to the 2021 fiscal year.

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