Skip to content
Back to index
V2587-17 10 October 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Retirement gratuity ineligible for 30% tax reduction if generation period is under two years

A worker inquired whether a severance gratuity paid upon retirement could qualify for the 30% tax reduction. The DGT has ruled that this does not constitute exempt compensation and fails to meet the requirements for the reduction applicable to irregular income.

The question raised

Tax treatment of the severance bonus.

The DGT's ruling

The severance bonus is income from personal labor and not an exempt dismissal indemnity. To apply the 30% reduction, the income must have a generation period exceeding two years or be notoriously irregular. In this case, the reduction does not apply because it is not irregular income and does not meet the dual condition of seniority in the company and the validity of the collective agreement exceeding two years.

Book your free first meeting