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V2413-24 25 November 2024 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · contingencia de jubilación

40% pension plan tax reduction may apply if early withdrawal occurs before 2025

A taxpayer inquired whether the 40% tax reduction for contributions made prior to 2007 could be applied when redeeming a pension plan following a collective redundancy. The Directorate General for Taxes (DGT) ruled that if the withdrawal is an early redemption due to retirement, the contingency occurs once the requirements for such a withdrawal are met.

The question raised

Possibility of applying the 40 percent reduction provided for in the transitional regime of the Personal Income Tax (IRPF).

The DGT's ruling

If the retirement benefit is received in advance following a collective redundancy, the contingency occurs when the employment relationship is terminated and the individual enters a state of unemployment. To apply the 40 percent reduction on contributions made up to 2006, the payment must be made within the period established by the twelfth transitional provision. In this case, as the requirements were met in 2022, the period for applying the reduction expires on December 31, 2024.

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