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V1045-16 15 March 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

40% reduction applicable to pension plan contributions made up to 2006

The taxpayer asks whether the 40% reduction can be applied to pension plan benefits received as a lump sum. The DGT rules that this is possible for the portion corresponding to contributions made until 31 December 2006, subject to certain requirements.

The question raised

Application of the 40 percent reduction to the portion corresponding to contributions made until December 31, 2006.

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 of the benefit corresponding to contributions made until December 31, 2006, provided that more than two years have elapsed since the first contribution. This reduction may only be applied to amounts received as a lump sum within the same tax period. For contingencies occurring in 2013, the transitional regime may only be applied to benefits received up to the 2021 tax year.

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