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V1239-24 29 May 2024 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

Potential application of the 40% reduction on pension plan benefits for early retirement

A participant in an occupational pension plan with contributions made prior to 2007 sought clarification on the tax treatment of their benefit redemption following a collective redundancy. The Directorate General for Taxes (DGT) clarifies that if the benefit is collected as early retirement, the contingency is deemed to occur when the requirements for such collection are met.

The question raised

Tax treatment of benefits received from a pension plan corresponding to contributions made prior to 2007.

The DGT's ruling

Pension plan benefits are considered earned income. If retirement is taken early due to collective redundancy, the contingency occurs when the employment relationship is terminated and the individual enters a state of unemployment. To apply the 40% reduction to contributions made prior to 2007, the benefit must be received within the period established by the twelfth transitional provision of the LIRPF, depending on the year in which the contingency occurs.

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