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V2254-14 3 September 2014 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

The 40% pension plan reduction can only be applied within a single tax year

The taxpayer inquired whether they could receive the remainder of their pension plan as a lump sum in future years and still apply the 40% reduction. The Directorate General for Taxes (DGT) ruled that this reduction can only be applied to amounts received as a lump sum within the same tax period.

The question raised

Possibility of receiving the remaining economic rights of the plan in the form of capital in future fiscal years, with the right to apply the 40 percent reduction.

The DGT's ruling

Pension plan benefits are considered earned income. The 40% reduction for receipt in the form of capital is only applicable to the portion corresponding to contributions made until December 31, 2006, provided that more than two years have elapsed since the first contribution. This reduction can only be granted to amounts received in the form of capital within the same tax period; therefore, the remaining amounts received in other years shall be taxed without said reduction.

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