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V0657-24 15 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Reduction for income with a generation period exceeding two years cannot be applied if used within the previous five years

A civil servant inquired whether she could apply the 30% reduction for income with a generation period exceeding two years to her 2024 retirement, having previously applied said reduction in 2019. The Directorate General of Taxes (DGT) ruled that she cannot apply it in 2024 because she exercised the benefit within the preceding five-year period, although she is permitted to amend her 2019 tax return to attempt to enable the right for 2024.

The question raised

Application of the aforementioned reduction to the employment income received in 2024.

The DGT's ruling

The reduction provided in Article 18.2 of the Personal Income Tax Law (LIRPF) is not applicable if, in the five tax periods preceding the due date, the taxpayer obtained other income with a generation period exceeding two years to which the reduction was applied. However, since the application of this reduction is optional, the taxpayer may file a supplementary tax return for previous fiscal years (within the statute of limitations) to remove said reduction and thereby attempt to comply with the requirement of not having applied it in the previous five years.

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