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V2549-15 3 September 2015 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Applicability of 30% reduction on fragmented severance payments

The taxpayer asks whether the 30% reduction under Article 18.2 of the LIRPF can be applied to a portion of a severance payment received from 2015. The tax authority confirms it can be applied if the ratio between generation years and fractionation years is met.

The question raised

Question posed: Whether the portion of the severance payment received as of 1 January 2015 and derived from the collective redundancy procedure will be subject to the reduction provided for in Article 18.2 of the Personal Income Tax Law, as amended by Law 26/2014, of 27 November, which modifies Law 35/2006, of 28 November, on Personal Income Tax, the consolidated text of the Non-Resident Income Tax Law, approved by Royal Legislative Decree 5/2004, of 5 March, and other tax regulations (BOE of 28 November).

The DGT's ruling

For severance payments received in installments, the 30% reduction is applicable if the quotient between the generation period (years of service) and the number of tax periods of installment is greater than two. All fiscal years in which the severance is received must be included in the installment calculation, including those that are exempt. The limit of 300,000 euros per year to which the reduction applies is maintained.

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