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V2360-17 18 September 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% tax withholding reduction applicable to permanent disability compensation

A worker receives compensation for absolute permanent disability as provided for in a collective agreement. The inquiry examines whether the reduction for irregular income can be applied when calculating the tax withholding.

The question raised

Type of withholding to be applied.

The DGT's ruling

The compensation for permanent disability paid by a company is considered income from employment obtained in a notoriously irregular manner over time. Therefore, the 30% reduction provided for in Article 18.2 of the Personal Income Tax Law is applicable. This reduction must be taken into account to determine the calculation base for withholding according to Article 83 of the Personal Income Tax Regulations. The income must be attributed to the tax period in which it becomes due to the recipient.

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