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V1000-18 18 April 2018 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

The 40% reduction may be applied to the redemption of pension plans if transitional deadlines are met

A civil servant who retired due to disability in 2015 inquires whether she can apply a reduction when redeeming her pension plan. The DGT explains that the 40% reduction may be applied to the portion of contributions made until 2006, provided that the receipt deadlines established in the transitional regulations are met.

The question raised

Taxation of the benefit in Personal Income Tax (IRPF). Possibility of applying a reduction.

The DGT's ruling

Pension plan benefits are considered income from employment. If received as a lump sum, a 40% reduction may be applied to the portion corresponding to contributions made until December 31, 2006. This reduction may only be applied to amounts received as a lump sum within the same tax period. The deadline for applying this transitional regime depends on the fiscal year in which the contingency occurs.

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