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V1162-20 29 April 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% reduction for irregular income may apply to lump-sum pension supplement substitution payments

A pensioner inquired whether receiving a lump sum in July 2020 to substitute a monthly pension supplement allows for the 30% reduction for irregular income. The Directorate General for Taxes (DGT) ruled that it is applicable, provided the income is attributed to a single tax period.

The question raised

Upon the entity proposing the substitution of the monthly component for a single payment to be made in July 2020, the inquiry concerns the application of the reduction under Article 18.2 of Law 35/2006.

The DGT's ruling

Compensation for the substitution of salary components, pensions, or annuities of indefinite duration is considered income from employment obtained in a notoriously irregular manner over time. To apply the 30% reduction under Article 18.2 of the LIRPF, such income must be attributed to a single tax period. This reduction is independent of whether similar reductions have been applied in the previous five years for income with a generation period exceeding two years.

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