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V2496-17 4 October 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% reduction on retirement incentives applicable if two conditions are met

A local council has requested clarification on whether early retirement incentives and ordinary retirement bonuses qualify for the 30% reduction under Article 18.2 of the Personal Income Tax Law (LIRPF). The Directorate General for Taxes (DGT) states that this is possible provided that specific requirements regarding length of service and the duration of the agreement are satisfied.

The question raised

Application of the 30 percent reduction established in Article 18.2 of Law 35/2006.

The DGT's ruling

To apply the 30% reduction for a generation period exceeding two years, two conditions must be met: that the income is linked to a minimum seniority in the company of said period and that the agreement or contract establishing it also exceeds two years. Furthermore, this reduction must not have been applied to other similar income in the previous five tax periods.

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