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V0999-21 20 April 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% tax reduction unavailable if mutual agreement compensation is paid over several years

A worker enquired whether the reduction for irregular income could apply to a contract termination compensation paid over five years. The DGT ruled that the reduction is only applicable if the amount is attributed to a single tax period.

The question raised

Application of the reduction under Article 18.2 of Law 35/2006.

The DGT's ruling

The 30% reduction provided for in Article 18.2 of the Personal Income Tax Law (LIRPF) for amounts by mutual agreement resolution only applies when they are imputed to a single tax year. As the compensation is received over five years, the requirements to apply said reduction are not met.

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