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V0323-20 11 February 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% reduction may apply to loyalty bonus and compensatory payment if generation and attribution requirements are met

A query was raised regarding whether the loyalty bonus and compensatory payment under a private education collective agreement qualify for the 30% reduction provided in Article 18 of the Personal Income Tax Law (LIRPF). The Directorate General for Taxes (DGT) ruled that both constitute employment income and that the reduction may apply provided the dual conditions of seniority and the validity of the collective agreement are satisfied.

The question raised

Application of the 30% reduction established in Article 18 of the Tax Law to the aforementioned remunerations provided for in the 2019 collective bargaining agreement.

The DGT's ruling

To apply the 30% reduction, the income must have a generation period exceeding two years, which requires that the income be linked to a minimum period of seniority in the company and that the agreement establishing it also exceeds two years. In this case, the condition is met for both the loyalty bonus and the compensatory payment, provided they are imputed to a single tax period and similar reductions have not been applied in the five previous periods.

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