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V0962-16 10 March 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

The 40% reduction for pension plan surrenders (pre-2007 contributions) can only be applied in a single tax year

A retiree residing in Ceuta inquired about the surrender of pension plans with contributions made prior to 2007, the application of the 40% reduction, and the tax deduction for income in Ceuta. The DGT clarified that the 40% reduction can only be applied once and applies specifically to the portion of contributions made up to 31 December 2006.

The question raised

Possibilities for redeeming said pension plans. Taxation of the benefit with the application of the 40 percent reduction. Possibility of applying the tax relief for income obtained in Ceuta.

The DGT's ruling

Pension plan benefits are considered earned income. 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 or mixed payment and two years have passed since the first contribution. This reduction may only be granted once for the set of plans of which the holder is a titular in the same tax period. Likewise, pension plan benefits are considered income obtained in Ceuta or Melilla for the purposes of the deduction under Article 68.4 of Law 35/2006.

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