Skip to content
Back to index
V0858-20 15 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% reduction cannot be applied to income obtained in a notoriously irregular manner

A retiree receives an out-of-court settlement to compensate for a lower pension caused by errors in their former company's social security contributions. The Directorate General of Taxes (DGT) has ruled that this payment does not allow for the application of the 30% reduction provided for in the Personal Income Tax (IRPF) Law.

The question raised

Application of the reduction contemplated in Article 18.2 of the Income Tax Law to the amount received.

The DGT's ruling

The 30% reduction for income from employment obtained in a notoriously irregular manner requires that the company has altered, suppressed, or modified economic perceptions of indefinite duration or working conditions. In this case, the compensation arises from an out-of-court settlement and does not stem from the modification of existing salary supplements or pensions. Therefore, the amount cannot be subject to said reduction.

Book your free first meeting