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V2794-23 16 October 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% tax reduction applicable to income with a generation period exceeding two years

A company has requested clarification on whether an extraordinary bonus paid to executives following a corporate sale allows for the application of the reduction provided under Article 18.2 of the Personal Income Tax Act (LIRPF). The Directorate General for Taxes (DGT) has ruled that, as the income has a generation period exceeding two years and is taxed within a single period, the reduction is applicable provided that all legal limits and conditions are met.

The question raised

Whether the reduction provided for in Article 18.2 of the LIRPF is applicable.

The DGT's ruling

The bonus has a generation period exceeding two years and is imputed in a single tax period. Therefore, it is possible to apply the 30% reduction provided for in Article 18.2 of the LIRPF. This application is conditional upon the fact that similar reductions have not been applied to other income with a generation period exceeding two years in the previous five tax periods and that it does not exceed the annual limit of 300,000 euros.

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