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V3104-14 18 November 2014 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · jubilación parcial

40% tax reduction cannot be applied to agreed partial retirement compensation

A worker enquired whether the compensation received for entering partial retirement could benefit from the tax reduction for irregular income. The DGT has ruled that this reduction is not applicable.

The question raised

Tax treatment applicable to Personal Income Tax regarding the compensation to be received in November 2014.

The DGT's ruling

The compensation does not have a generation period exceeding two years, as the rights arise ex-novo from the partial retirement agreement. It is also not considered notoriously irregular income according to the Regulation, as it is not compensation for a unilateral modification of working conditions, but rather the result of a voluntary agreement. Therefore, the 40% reduction is not applicable.

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