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V1028-18 24 April 2018 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

40% pension plan reduction applicable until 31 December 2019 if retirement occurred in 2011

The inquirer asks about the deadline for applying the 40% reduction to pension plan benefits involving contributions made prior to 2007. The Directorate General for Taxes (DGT) rules that, since the contingency occurred in 2011, the period for applying this transitional regime expires on 31 December 2019.

The question raised

Expiration of the deadline to apply the 40 percent reduction provided for in the transitional regime.

The DGT's ruling

Pension plan benefits are considered earned income. If received as a lump sum, a 40% reduction may be applied to the portion corresponding to contributions made until December 31, 2006, provided that the terms of the twelfth transitional provision are met. This reduction may only be applied to amounts received as a lump sum within the same tax period, at the taxpayer's discretion. For contingencies occurring in 2011, the deadline to apply this regime expires on December 31, 2019.

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