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V1874-20 10 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% tax reduction on stock option income applicable if generation period exceeds two years

A company has requested clarification regarding the application of the 30% Personal Income Tax (IRPF) reduction for stock options granted to employees. The Directorate-General for Taxes (DGT) states that these benefits constitute employment income and may qualify for the reduction, provided that specific generation requirements and quantitative limits are met.

The question raised

Application of the 30 percent reduction provided for in Article 18.2 of the Personal Income Tax Law.

The DGT's ruling

The granting of stock options to employees constitutes employment income that accrues upon the exercise of the right. To apply the 30% reduction, the period between the granting and the exercise must exceed two years. Furthermore, this reduction must not have been applied to other income with a generation period exceeding two years in the five previous tax periods. The reduction is subject to an annual limit of 300,000 euros.

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