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V2505-17 5 October 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Severance pay for ERE-related dismissals approved after March 2009 is subject to a 45-day salary exemption limit

A query was raised regarding which salary should be used to calculate the tax-exempt portion of severance pay resulting from a Collective Redundancy Procedure (ERE). The Directorate General for Taxes (DGT) has determined that, for EREs approved since March 2009, the exemption limit is 45 days' salary per year of service.

The question raised

Determination of the salary for the purposes of calculating the exempt severance pay.

The DGT's ruling

For dismissals in Collective Redundancy Procedures (ERE) approved as of March 8, 2009, the exempt portion of the severance pay is that which does not exceed 45 days of salary per year of service, up to a maximum of 42 monthly payments. The excess shall be taxed as employment income. Regarding the regulatory salary, it is mentioned that the Supreme Court includes life and medical insurance premiums, and the retirement plan, as benefits in kind.

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