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V0162-16 19 January 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimiento del trabajo

Swiss compensation payment taxed in Spain as income from work

A Spanish resident asks whether a one-off payment from a Swiss compensation fund, replacing a pension supplement, is subject to Spanish tax. The DGT states that, under the described conditions, the income must be taxed in Spain as income from work.

The question raised

Whether said payment is subject to taxation in Spain and under which concept.

The DGT's ruling

If the lump-sum payment replaces a supplementary benefit of a retirement pension from previous employment, it may only be subject to taxation in Spain pursuant to the Spain-Switzerland Convention. It is classified as income from employment under Article 17 of the Personal Income Tax Law (LIRPF). If Switzerland applies an improper withholding tax, it may not be deductible in Spain and its refund must be requested in Switzerland.

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