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V2972-19 24 October 2019 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

Expiry of the 40% pension plan reduction based on the year of contingency

A query was raised regarding whether a 40% reduction could be applied when redeeming a pension plan following a collective redundancy. The DGT ruled that, as the requirements for early retirement collection were met in 2016, the period for applying said reduction expired on 31 December 2018.

The question raised

Possibility of applying the 40 percent reduction.

The DGT's ruling

Pension plan benefits are considered earned income. The 40% reduction is only applicable to the portion of the benefit corresponding to contributions made until December 31, 2006, if received as a lump sum and within the period specified in the twelfth transitional provision. If the retirement contingency is anticipated due to unemployment, the contingency occurs when the requirements for early collection are extinguished. In this case, as the contingency occurred in 2016, the period for applying the reduction expired in 2018.

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