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V0031-23 16 January 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · jubilación demorada

The 30% reduction on lump-sum economic supplements for deferred retirement is applicable

A taxpayer inquired whether the lump-sum payment for deferred retirement qualifies for the 30% reduction applicable to irregular income or income generated over more than two years. The DGT ruled that while the reduction under Article 18.2 does not apply, the reduction under Article 18.3 for benefits paid as a lump sum is applicable.

The question raised

Personal Income Tax treatment of the aforementioned lump-sum payment.

The DGT's ruling

The 30% reduction provided for in Article 18.2 of the Personal Income Tax Law (Ley del IRPF) is not applicable, as this incentive does not constitute income obtained in a notoriously irregular manner over time, nor does the reduction for a generation period exceeding two years apply to this type of benefit. However, the 30% reduction provided for in Article 18.3 of the Personal Income Tax Law is applicable to the lump-sum amount of the deferred retirement economic supplement, as it constitutes a benefit in the form of capital.

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