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V0730-24 16 April 2024 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

The 40% reduction on pension plan withdrawals is only applicable if received within the legal timeframe

A taxpayer inquired whether they could apply the 40% reduction for contributions made prior to 2007 after retiring in 2021. The Directorate General of Taxes (DGT) ruled that the deadline to apply this transitional regime expired on 31 December 2023.

The question raised

Available period to apply the 40 percent reduction provided for in the transitional regime.

The DGT's ruling

Pension plan benefits are considered earned income. If received as a lump sum, the 40% reduction may be applied to the portion corresponding to contributions made until December 31, 2006, provided that the deadlines set forth in the twelfth transitional provision are met. For contingencies occurring in 2021, the deadline to receive the benefit and apply the transitional regime expired on December 31, 2023.

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