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V0604-23 14 March 2023 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · plan de pensiones

Deadline for 40% reduction on pre-2007 pension contributions ends 31 December 2024 for early retirement

A participant in an occupational pension scheme with contributions made prior to 2007 seeks clarification on the deadline for applying the 40% tax reduction. The Directorate General for Taxes (DGT) rules that if retirement benefits are collected early following a collective redundancy, the contingency occurs at that moment, and the deadline for the reduction expires at the end of the following two tax years.

The question raised

Period for applying the 40 percent reduction provided for in the transitional regime.

The DGT's ruling

If the retirement benefit is collected in advance, the contingency occurs when the requirements for said collection are met (termination of the employment relationship due to collective dismissal and unemployment status). The transitional regime for applying the 40 percent reduction on contributions made until 2006 can only be applied in the fiscal year in which the contingency occurs or in the two following fiscal years. In the case of an advance collection initiated in 2022, the period ends on December 31, 2024.

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