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V0636-24 11 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% reduction on early retirement bonuses may apply if certain requirements are met

A taxpayer inquired whether the bonus received for early retirement allows for the 30% reduction under Article 18.2 of the Personal Income Tax Act (LIRPF). The Directorate General of Taxes (DGT) indicates that this is possible if the income has a generation period exceeding two years and is attributed to a single tax period.

The question raised

Application of the reduction referred to in Article 18.2 of Law 35/2006, of November 28, on Personal Income Tax.

The DGT's ruling

To apply the 30% reduction on income from employment with a generation period exceeding two years, two conditions must be met: that the income is linked to seniority in the company of at least that period and that the collective agreement or contract establishing it also exceeds two years. Furthermore, the income must be attributed to a single tax period and not exceed 300,000 euros annually. The reduction does not apply if similar benefits have been applied in the five previous tax periods.

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