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V2669-23 2 October 2023 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

40% reduction for pre-2007 contributions may apply to early retirement payouts

A taxpayer queried the tax treatment of pension plan benefits involving contributions made prior to 2007 following a collective redundancy. The Directorate General for Taxes (DGT) ruled that if retirement benefits are collected early, the contingency occurs when the requirements for such early collection are met.

The question raised

Tax treatment of benefits received from a pension plan corresponding to contributions made prior to 2007.

The DGT's ruling

Pension plan benefits are considered income from employment. If retirement is taken early due to collective redundancy, the contingency occurs when the employment relationship is terminated and the individual enters a state of unemployment. To apply the 40% reduction to contributions made prior to 2007, the benefit must be received within the period established in the twelfth transitional provision of the LIRPF.

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