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V1142-16 21 March 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Reduction for irregularity cannot be applied to mutual agreement settlements paid over several years

A worker enquired whether the 30% reduction for irregularity could be applied to a settlement received via mutual agreement. The DGT ruled that since the total amount is not attributed to a single tax period, this reduction does not apply.

The question raised

Application of the reduction for irregularity to the excess of the compensation that is not exempt.

The DGT's ruling

Amounts resulting from the mutual agreement to terminate an employment relationship are considered income obtained in a notoriously irregular manner. However, the 30% reduction provided for in Article 18.2 of the LIRPF is only applicable when such income is imputed to a single tax period. As the compensation is received over several fiscal years, the reduction is not applicable.

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