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V2479-14 23 September 2014 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

The 40% reduction on compensation for confidentiality commitment is not applicable

It is inquired whether compensation for a confidentiality commitment, received following a collective dismissal, may qualify for the 40% reduction for notoriously irregular income. The DGT responds that it is not possible to apply said reduction.

The question raised

The inquiry concerns the Personal Income Tax (IRPF) treatment of the compensation received that exceeds the limit legally established in the Workers' Statute, and its consideration as notoriously irregular employment income for the purposes of applying the 40 percent reduction under Article 18.2 of Law 35/2006.

The DGT's ruling

The portion of the dismissal compensation that exceeds the limits set by the Workers' Statute is taxed as employment income. However, the amount for the confidentiality commitment does not qualify as notoriously irregular income under Article 11 of the Tax Regulation, nor is it linked to a generation period exceeding two years. Therefore, the 40% reduction on said concept is not applicable.

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