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V2947-20 30 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

30% reduction in early retirement incentives applicable if two conditions are met

A taxpayer queried whether early retirement incentives under a municipal agreement allow for the 30% reduction provided by Article 18.2 of the IRPF Act. The Directorate General for Taxes (DGT) ruled that this is possible if the income relates to a generation period exceeding two years and seniority requirements are satisfied.

The question raised

Application of the reduction provided in Article 18.2 of Law 35/2006 to the aforementioned incentive.

The DGT's ruling

To apply the 30% reduction, the income must have a generation period exceeding two years. This requires that the worker has a minimum seniority in the company of that period and that the agreement or convention establishing the incentive also exceeds two years. Furthermore, this reduction must not have been applied to other income with a generation period exceeding two years in the previous five tax periods.

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