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V2811-23 16 October 2023 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

30% tax reduction cannot be applied to collective retirement insurance benefits

A taxpayer inquired whether the tax reduction for irregular income could be applied to a lump-sum payment from a collective insurance scheme received upon retirement. The Directorate General for Taxes (DGT) ruled that such benefits are excluded from this reduction.

The question raised

Possibility of applying the reduction under Article 18.2 of Law 35/2006 on Personal Income Tax.

The DGT's ruling

Retirement benefits from collective insurance contracts that implement pension commitments are considered income from employment. However, Article 18.2 of the Personal Income Tax Law expressly excludes from the 30% reduction the income provided for in Article 17.2.a).5th. Therefore, the reduction is not applicable even if they are classified as obtained in a notoriously irregular manner.

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