Skip to content
Back to index
V2543-19 19 September 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Voluntary severance pay is taxed in the tax year the employment relationship ends

A worker inquired which tax year should be used to declare a payment received from an incentivised voluntary severance scheme. The DGT ruled that it must be attributed to the period in which the income becomes due, i.e., when the effective termination of employment occurs.

The question raised

Temporal imputation of the indemnity for the termination of the employment relationship.

The DGT's ruling

The severance payment for the termination of the employment relationship is classified as income from employment. Pursuant to Article 14.1.a) of the Personal Income Tax Law (LIRPF), such income is imputed to the tax period in which it becomes due to the recipient. Therefore, the income is due on the date of effective termination of employment and must be taxed in said tax year.

Book your free first meeting