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V0374-18 13 February 2018 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

30% tax reduction not applicable to payments to employees from collective insurance surrenders

A company inquired whether payments made to employees following the cancellation of collective life and pension insurance policies qualify for the 30% tax reduction. The Directorate-General for Taxes (DGT) ruled that while these amounts constitute employment income, they do not meet the specific requirements for the reduction.

The question raised

Tax treatment in Personal Income Tax regarding the amounts paid to workers. Possibility of applying the 30 percent reduction.

The DGT's ruling

The amounts received by employees are considered full income from employment. The 30% reduction under Article 18.2 of Law 35/2006 is not applicable because they are not considered income with a generation period exceeding two years, as the right to receive them arises with the entity's decision to pay them. They are also not classified as income obtained in a notoriously irregular manner over time.

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