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V2696-16 15 June 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Exemption from redundancy pay may be lost if the worker is hired by a linked company within three years

A query was raised regarding whether redundancy pay maintains its tax exemption when a worker is hired the following day by a company within the same group. The DGT indicates there is a presumption that no real severance has occurred if the new employment begins within the following three years.

The question raised

Tax treatment under Personal Income Tax (IRPF) of severance pay in the event of providing services to the company that dismissed them. Existence of real and effective severance of the worker from the company.

The DGT's ruling

The exemption of severance pay requires the real and effective severance of the worker's relationship with the company. It is presumed that such severance does not exist if, in the three years following the dismissal, the worker provides services to the same company or to another linked company. This presumption admits evidence to the contrary to prove that the new relationship does not nullify the original severance.

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