Back to index
V0516-23 6 March 2023 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

40% tax reduction for pre-2007 pension contributions can be applied after using the 30% redundancy reduction

A taxpayer inquired whether they could apply the 40% tax reduction for pension plan benefits (contributions made up to 2006) after having already applied the 30% reduction for redundancy payments within the last five years. The Directorate General for Taxes (DGT) ruled that both reductions are distinct and governed by different legal provisions; therefore, applying one does not preclude the application of the other.

The question raised

Possibility of applying the reduction provided for in the twelfth transitional provision of Law 35/2006 to the benefit received from your pension plan, when the reduction under Article 18.2 has been applied to your severance payment within the previous five periods.

The DGT's ruling

The 40% reduction for pension plan benefits (twelfth transitional provision) and the 30% reduction for income with a generation period exceeding two years (Article 18.2) are distinct. The exclusion from the 30% reduction only affects other income with a generation period exceeding two years that have utilized said reduction. Therefore, applying the 30% reduction to a severance payment does not prevent the application of the 40% reduction to a pension plan benefit.

Book your free first meeting