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V1310-14 14 May 2014 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos íntegros del trabajo

40% reduction on social welfare capital applicable if two conditions are met

A retiree has enquired whether they can apply a 40% reduction to capital received from their company for social welfare purposes. The Directorate General for Taxes (DGT) has ruled that this is only possible if two specific requirements regarding the period during which the right was generated are satisfied.

The question raised

Possibility of applying the reduction provided for in Article 18.2 of Law 35/2006.

The DGT's ruling

To apply the 40% reduction on gross employment income, a generation period exceeding two years must exist. This requires that the employee has a minimum seniority of two years in the paying entity and that the collective agreement or contract establishing the right to payment has also completed that period exceeding two years. The DGT cannot confirm whether these requirements are met in this specific case due to a lack of data.

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