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V1598-19 27 June 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Mutual agreement settlements do not qualify for exemptions or irregularity reductions if paid periodically

A worker inquired whether monthly compensation received following an early departure by mutual agreement could be exempt or benefit from an irregularity reduction. The DGT has determined that such payments must be taxed as employment income without any tax benefits.

The question raised

Application of the reduction for irregularity provided for in Article 18.2 of the Law to the compensation received following early retirement.

The DGT's ruling

The termination of the employment relationship by mutual agreement does not allow for the application of the exemption provided in Article 7 e) of the LIRPF. Likewise, the reduction for income obtained in a notoriously irregular manner under Article 18.2 of the LIRPF is not applicable because the payments are not imputed to a single tax period. For these amounts to be considered irregular, they must be satisfied within a single fiscal year.

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