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V2353-15 24 July 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Severance pay for collective redundancies is exempt up to the limit of the Workers' Statute or 180,000 euros, as applicable

A worker inquired about the tax treatment of the severance pay received due to a collective redundancy in 2015. The DGT clarifies that the exempt portion is limited to the lesser of the mandatory amount under the Workers' Statute or 180,000 euros.

The question raised

Question raised: Tax treatment of severance pay.

The DGT's ruling

In collective redundancies due to economic, technical, organizational, production, or force majeure reasons, the exempt severance pay is that which does not exceed the mandatory limits of the Workers' Statute, with a maximum cap of 180,000 euros. The excess is considered earned income from employment and may be subject to the 30% reduction provided in Article 18.2 of the LIRPF. The 180,000 euro limit applies if the communication to the labor authority was made on or after August 1, 2014.

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