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V2148-16 19 May 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

Collective retirement insurance benefits classified as employment income without reduction

A taxpayer inquired whether the capital from a collective retirement insurance scheme established via a collective agreement is eligible for the 40% or 30% reduction applicable to irregular employment income. The Directorate General for Taxes (DGT) ruled that these payments are classified as employment income and are not eligible for either of the aforementioned reductions.

The question raised

Tax treatment of the amount to be received. In particular, the possibility of applying the 40 percent reduction established by the transitional regime of Law 35/2006. In the negative case, the possibility of being considered irregular income.

The DGT's ruling

Benefits from collective insurance policies used to implement company pension commitments are considered income from employment. The 40% reduction provided for in the eleventh transitional provision is not applicable as it has not been proven that the insurance was contracted before January 20, 2006. Furthermore, the income referred to in Article 17.2.a).5 is excluded from the 30% reduction for irregular income.

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