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V2063-18 12 July 2018 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · contingencia de jubilación

Retirement contingency is deemed to occur at age 65 if retirement cannot be accessed

A query was raised regarding when the retirement contingency is considered to have occurred for the purpose of applying the 40% reduction to pension plans with contributions made prior to 2007. The Directorate General for Taxes (DGT) ruled that, if retirement cannot be accessed, the contingency occurs upon reaching age 65, provided that no professional activity is carried out and no social security contributions are being made.

The question raised

For the purposes of applying the 40 percent reduction provided for in the transitional regime, when is the retirement contingency considered to have occurred.

The DGT's ruling

To apply the 40% reduction under the transitional regime, the retirement contingency is determined according to the Social Security Regime. If the participant cannot access retirement, the contingency is understood to have occurred when they reach 65 years of age, cease to engage in labor or professional activity, and do not contribute to retirement in any regime. The period for receiving benefits and applying this regime depends on the fiscal year in which said contingency occurred.

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