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V2971-19 24 October 2019 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · mutualidad de previsión social

40% reduction applicable to lump-sum payments from social welfare mutual funds

A taxpayer inquired whether the 40% tax reduction could be applied in 2019 to a retirement benefit received from a social welfare mutual fund. The Directorate General for Taxes (DGT) ruled that this is possible for the portion corresponding to contributions made up to 31 December 2006, provided the receipt deadlines are met.

The question raised

Possibility of applying the 40 percent reduction in the 2019 tax year to the benefit received from a social welfare mutual society upon retirement.

The DGT's ruling

Benefits from social welfare mutual societies received as a lump sum are considered income from employment. The 40% reduction may be applied to the portion of the benefit corresponding to contributions made until December 31, 2006, provided that more than two years have elapsed since the first contribution. For contingencies occurring in 2019, the transitional regime may be applied in the tax year of the contingency or in the two following years.

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