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V1599-19 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 exemption or irregularity reduction if paid periodically

A worker enquired whether monthly compensation received following an early departure by mutual agreement was exempt or eligible for the irregularity reduction. The DGT ruled that it must be taxed as employment income and the reduction does not apply because the payments are not attributed to a single tax period.

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 compensation for termination by mutual agreement is not exempt under Article 7 e) of the LIRPF. To apply the reduction for notoriously irregular income under Article 18.2 of the LIRPF, the amounts must be attributed to a single tax period. As they are received monthly, this requirement is not met.

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