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V2559-19 19 September 2019 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

Pension plan benefits taxed as employment income rather than savings income

A query was raised regarding whether the returns from a pension plan withdrawal could be taxed as savings income. The Directorate General for Taxes (DGT) ruled that these benefits constitute employment income and must be included in the general tax base.

The question raised

Taxation of benefits received. Possibility of including the profitability obtained in the pension plan as savings income.

The DGT's ruling

Pension plan benefits are considered earned income and must be included in the general taxable base of the Personal Income Tax (IRPF). If the benefit is received as a lump sum, a 40% reduction may be applied to the portion corresponding to contributions made before December 31, 2006, provided the time and timing requirements of the twelfth transitional provision are met.

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