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V2615-21 27 October 2021 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Dismissal compensation exempt up to unjust dismissal limit and €180,000

Tax authorities confirm that compensation for collective dismissals is exempt up to the unjust dismissal threshold or €180,000, with excess subject to a 30% reduction if generation period requirements are met.

The question raised

Question posed: Application of the exemption regulated in Article 7 e) of Law 35/2006, on Personal Income Tax, and the 30% reduction for irregularity provided for in Article 18.2 of the same Law.

The DGT's ruling

In collective redundancies, the exempt portion of the severance pay is that which does not exceed the limit for unfair dismissal (33 days per year with a maximum of 24 monthly payments for contracts entered into after 12/02/2012, or the limits set forth in the fifth transitional provision of Law 3/2012) and the cap of 180,000 euros. The excess is taxed as employment income. The 30% reduction for irregularity is applicable to the excess if the generation period exceeds two years and, in the case of fractional payment, if the quotient between years of service and tax periods is greater than two.

Apply this to a real case

What is published here, applied to a company or a specific case. The first meeting is free.

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