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V0782-21 31 March 2021 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

The 40% pension plan reduction can only be applied within a single tax year

The inquirer seeks to know whether the 40% reduction for contributions made prior to 2007 can be applied when receiving pension plan payouts upon retirement. The Directorate General for Taxes (DGT) rules that the reduction may only be applied to lump-sum amounts received within a single tax period.

The question raised

Possibility of applying the 40 percent reduction provided for in the transitional regime. Temporal imputation.

The DGT's ruling

The 40% reduction is applicable to the portion of the benefit corresponding to contributions made until December 31, 2006, provided that it is received as a lump sum and within the period established by the twelfth transitional provision. This reduction may only be granted to amounts received in the same tax period, at the taxpayer's discretion. The remaining amounts received in other tax years shall be taxed without said reduction. Temporal imputation is determined by the moment the benefit becomes due, according to the date of receipt.

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