Skip to content
Back to index
V1001-21 20 April 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción del 30%

30% tax reduction unavailable if severance pay is spread over several years

A worker inquired whether the 30% tax reduction could apply to a mutual agreement severance payment to be received in monthly instalments over several years. The Directorate General for Taxes (DGT) ruled that this reduction is only applicable if the income is attributed to a single tax period.

The question raised

Application of the reduction contemplated in Article 18.2 of the Personal Income Tax Law to the compensation for termination of the employment relationship of the taxpayer.

The DGT's ruling

The 30% reduction provided for in Article 18.2 of the Personal Income Tax Law (LIRPF) for income obtained in a notoriously irregular manner, such as amounts by mutual agreement resolution, only applies when imputed in a single tax year. As payments are received monthly over several years, the requirement of imputation in a single tax period is not met.

Book your free first meeting