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V2468-24 9 December 2024 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · contingencia de jubilación

Conditions for applying the 40% reduction on pension plans under the transitional regime

A taxpayer inquired whether they could apply the 40% reduction for contributions made prior to 2007 after retiring in 2017. The Directorate General of Taxes (DGT) ruled that the deadline to apply this transitional regime for 2017 contingencies expired on 31 December 2019.

The question raised

Possibility of applying the 40 percent reduction provided for in the transitional regime.

The DGT's ruling

Pension plan benefits constitute earned income. The 40% reduction may be applied to the portion of the benefit corresponding to contributions made until December 31, 2006, provided that it is received as a lump sum and within the period established by the twelfth transitional provision of the Personal Income Tax Law (LIRPF). For contingencies occurring in 2017, the period for receiving benefits and applying the transitional regime ended on December 31, 2019.

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