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V2062-18 12 July 2018 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · planes de pensiones

The 40% pension plan reduction can only apply to amounts received within the same tax year

A taxpayer inquired whether receiving part of a pension plan benefit without applying the 40% reduction prevents them from applying it in a subsequent tax year. The Directorate General for Taxes (DGT) ruled that the reduction can only be applied to lump-sum amounts received within the same tax period.

The question raised

Whether the receipt of amounts in a tax year without applying the 40 percent reduction prevents the receipt of part of the benefit with the application of said reduction in a subsequent tax year.

The DGT's ruling

The 40% reduction for benefits paid in a lump sum may only be granted to amounts received within the same tax period, at the taxpayer's discretion, corresponding to contributions made until December 31, 2006. The remaining amounts received in other tax years shall be taxed in their entirety without the application of said reduction, even if they are also received as a lump sum. The taxpayer may choose the tax year in which to apply the reduction within the time limits provided in the twelfth transitional provision.

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