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V0877-23 13 April 2023 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · régimen transitorio

Deadline for 40% reduction on early pension plan withdrawals ends in 2024

An individual facing collective redundancy sought clarification on the deadline to apply the 40% tax reduction for contributions made prior to 2007. The Directorate General for Taxes (DGT) ruled that if the withdrawal is due to early retirement, the contingency occurs when the employment relationship is terminated and the individual enters unemployment.

The question raised

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

The DGT's ruling

If the retirement benefit is collected early, the contingency occurs when the requirements for said collection are met (termination of the employment relationship due to collective dismissal and status of unemployment). For contingencies occurring in 2022, the deadline to apply the transitional regime and the 40% reduction ends on December 31, 2024. The reduction applies to the portion of the benefit in the form of capital corresponding to contributions made until December 31, 2006.

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