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V0029-23 16 January 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · jubilación demorada

30% reduction applies to lump-sum payments for delayed retirement

A taxpayer queried whether a lump-sum payment for delayed retirement qualifies for the 30% reduction under Article 18 of the Personal Income Tax Act (LIRPF). The Directorate General for Taxes (DGT) ruled that since it is a Social Security benefit received as a lump sum, the reduction is applicable.

The question raised

In the event that option b) is chosen, i.e., opting to receive a lump sum for each full year contributed between the date on which said age was reached and the date of the triggering event for the pension, the question is raised regarding the tax treatment of the receipt of said single payment from the Social Security for "delayed retirement", and specifically, whether it is possible to apply in this case the 30% reduction percentage provided for in Article 18 of the LIRPF.

The DGT's ruling

The economic supplement for delayed retirement, consisting of a lump sum under Article 210.2.b) of the TRLGSS, is considered income from employment. Therefore, the 30 percent reduction provided for in Article 18.3 of the IRPF Law is applicable when received as capital.

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