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V0618-20 31 March 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Collective dismissal indemnities have exemption limits and 30% reduction rules

A worker asks about the tax treatment of a collectively dismissed indemnity received in instalments and whether supplementary tax declarations can be filed. The DGT clarifies exemption limits and conditions for applying the 30% reduction for irregular income.

The question raised

Tax treatment, under Personal Income Tax (IRPF), of the compensation for the termination of the employment relationship. Filing of supplementary Personal Income Tax returns for the 2016, 2017, and 2018 tax years.

The DGT's ruling

The compensation for collective redundancy is exempt up to the lesser of: the mandatory amount established by the Workers' Statute for unfair dismissal or 180,000 euros. The excess is taxed as employment income, and the 30% reduction may be applied if the generation period divided by the number of years of installment payments is greater than two. To regularize the situation, the taxpayer may request the rectification of their tax returns or file supplementary tax returns.

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