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V2546-15 3 September 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Application of 30% reduction on phased severance payments

The taxpayer asks how to apply the reduction for income generated over two years to a severance payment received across multiple years. The tax authority confirms this is possible if the ratio of generation years to payment years exceeds two.

The DGT's ruling

For severance payments received in installments, the 30% reduction under Article 18.2 of the LIRPF is applicable if the quotient between the number of years of generation (years of service) and the number of tax periods of installment is greater than two. In the calculation of the installment, all fiscal years in which the severance is received must be included, even those in which the portion is exempt. The limit of 300,000 euros per year to which the reduction applies is maintained.

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