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V0249-21 12 February 2021 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · jubilación parcial

40% pension plan reduction applicable if benefits are received within statutory timeframes

The inquirer asks whether the 40% reduction can be applied to pension plan contributions made prior to 2007 upon retirement. The Directorate-General for Taxes (DGT) explains that this depends on when the retirement contingency is deemed to have occurred in order to comply with statutory deadlines.

The question raised

Possibility of receiving the retirement benefit from pension plans and applying the 40 percent reduction to the portion of the benefit corresponding to contributions made prior to 2007.

The DGT's ruling

The 40% reduction for contributions made prior to 2007 is only applicable if the benefit is received within the timeframes established by the twelfth transitional provision of Law 35/2006. The retirement contingency generally occurs upon accessing full retirement, but if the collection of the partial retirement benefit begins, the contingency is understood to have occurred at that moment. The period for applying the transitional regime depends on the fiscal year in which said contingency occurs.

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