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V1418-22 16 June 2022 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

40% reduction on pension plan benefits applicable to contributions made before 2007

A taxpayer queried whether pension plan beneficiaries can apply the 40% tax reduction following the death of the participant. The Directorate General for Taxes (DGT) has ruled that this is possible for the portion of contributions made up to 31 December 2006, provided all legal deadlines and requirements are met.

The question raised

First question. In the event of death without having redeemed the pension plan, the possibility for the beneficiaries (legal heir) thereof to apply the 40 percent reduction.

The DGT's ruling

Pension plan benefits are considered income from employment. The 40% reduction may be applied to the portion of the benefit corresponding to contributions made until December 31, 2006, if received as a lump sum and within the timeframes established by the twelfth transitional provision. This reduction may only be applied once, within the same tax period, at the taxpayer's discretion. The period for receiving benefits and applying the reduction depends on the fiscal year in which the contingency occurs.

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