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V0706-23 23 March 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · baja incentivada

30% reduction applicable to severance pay for incentivised departures by mutual agreement

A query was raised regarding whether severance pay for incentivised departures under a collective agreement qualifies for the reduction applicable to irregular earnings. The Directorate General for Taxes (DGT) has ruled that, as the termination is by mutual agreement, this reduction is indeed applicable.

The question raised

Application of the reduction provided for in Article 18.2 of the Personal Income Tax Law to the compensation for incentivized redundancies under Article 56 bis of the XVII Collective Agreement of Transformación Agraria S.A.

The DGT's ruling

The compensation for incentivized redundancy constitutes an amount paid by the company due to the mutual agreement termination of the employment relationship. This case is regulatory classified as income from employment obtained in a notoriously irregular manner over time. Therefore, the 30% reduction provided for in Article 18.2 of the Personal Income Tax Law (LIRPF) is applicable, provided that it is imputed to a single tax period.

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