Skip to content
Back to index
V0794-20 8 April 2020 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · régimen transitorio

Pension plan benefits received in 2020 are ineligible for the 40% reduction if the contingency occurred in 2017

The inquirer asks whether the 40% reduction under the transitional regime can be applied to pension plan redemptions made in 2019 and 2020. The Directorate General for Taxes (DGT) rules that, as these are early retirement payments, the contingency is deemed to have occurred when the requirements for early collection were met (2017). Consequently, the deadline to apply the reduction expired in 2019.

The question raised

Whether the 40 percent reduction provided for in the transitional regime can be applied to the amounts received in 2019 and 2020

The DGT's ruling

If the retirement benefit is paid in advance, the contingency occurs when the requirements for said advance payment are met. To apply the 40% reduction under the transitional regime, the benefits must be received in the fiscal year of the occurrence or in the two following years. If the contingency occurred in 2017, the period for applying the reduction ends on December 31, 2019. Therefore, amounts received in 2020 cannot benefit from said reduction.

Book your free first meeting