Skip to content
Back to index
V2514-24 10 December 2024 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

Potential application of the 40% reduction on pension plan withdrawals based on the year the contingency occurs

A taxpayer has inquired whether they can apply the 40% reduction for contributions made prior to 2007 when withdrawing their pension plan in 2023, following their retirement in 2021. The Directorate General of Taxes (DGT) has ruled that this is possible, provided the time limits set out in the twelfth transitional provision and the requirements of the regulation are met.

The question raised

1. Possibility of applying the 40 percent reduction provided for in the transitional regime for the redemption of pension plans in the year 2023.

The DGT's ruling

Pension plan benefits constitute earned income. If received as a lump sum, a 40% reduction may be applied to the portion corresponding to contributions made until December 31, 2006. To qualify, more than two years must have elapsed since the first contribution, and the benefit must be received within the period established according to the year in which the contingency occurred. In the case of retirement, the contingency is the access to retirement benefits under the Social Security system.

Book your free first meeting