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V2170-21 30 July 2021 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · reducción del 40%

Inability to apply 40% reduction to 2020 pension plan withdrawals if the contingency occurred in 2017

A taxpayer inquired whether a 40% reduction could be applied to a lump-sum withdrawal in 2020 for contributions made prior to 2007. The Directorate General for Taxes (DGT) ruled that, since the requirements for early retirement were met in 2017, the deadline to apply said reduction had already expired in 2019.

The question raised

Possibility of applying the 40 percent reduction to the amounts redeemed in the year 2020.

The DGT's ruling

The 40% reduction is only applicable if the benefit is received within the period established in the twelfth transitional provision of the LIRPF. In cases of early retirement payout, the contingency occurs when the requirements for payment are met (termination of employment relationship and unemployment). If these requirements were met in 2017, the period for applying the transitional regime ended on December 31, 2019, preventing the reduction in redemptions made in 2020.

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