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V0224-21 10 February 2021 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

40% pension plan reduction may apply if received before the legal deadline expires

A retiree enquired whether the 40% reduction could be applied to a pension plan after having received another plan in 2020 without said reduction. The DGT clarifies that the reduction can only be applied once per tax period to contributions made up to 2006.

The question raised

Possibility of applying the 40 percent reduction provided for in the transitional regime.

The DGT's ruling

Pension plan benefits are considered earned income. The 40% reduction applies to the portion of the benefit corresponding to contributions made until December 31, 2006, provided that it is received as a lump sum and within the period established by the twelfth transitional provision. This reduction may only be granted to amounts received as a lump sum within the same tax period, at the taxpayer's discretion. For contingencies occurring in 2019, the period for applying this regime ends on December 31, 2021.

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