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V0740-20 6 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Exemption from redundancy pay presumed invalid if employee returns to company within three years

A query was raised regarding whether redundancy pay remains exempt if a worker is rehired by the same company following a change of control. The DGT indicates that rejoining within three years creates a presumption that there was no real and effective severance of the employment relationship.

The question raised

Tax treatment under Personal Income Tax (IRPF) of severance pay in the event of providing services to the company that dismissed the worker. Existence of real and effective severance of the worker from the company.

The DGT's ruling

The exemption of severance pay requires the real and effective severance of the worker's relationship with the company. It is presumed that such severance does not exist if the worker resumes providing services to the same company or an affiliated company within three years following the dismissal. This presumption admits evidence to the contrary to prove that the new relationship does not nullify the original severance.

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