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V3162-15 20 October 2015 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

40% reduction possible on pension plan withdrawals for pre-2007 contributions

The consultant asks whether a 40% reduction can be applied to pre-2007 contributions when withdrawing from pension plans due to unemployment and later upon retirement. The DGT confirms that such reduction is applicable under the temporary provision, as retirement is a distinct contingency from unemployment.

The question raised

Possibility of applying the 40 percent reduction to the amount received in the year 2016, corresponding to the portion of contributions made until December 31, 2006. Likewise, whether there is a right to apply said reduction to benefits received as a lump sum from other pension plans in a future fiscal year, following the commencement of retirement.

The DGT's ruling

Pension plan benefits are considered earned income. If received as a lump sum, the 40% reduction may be applied to the portion of contributions made until December 31, 2006. Since retirement is a contingency distinct from unemployment, the reduction may be applied again when redeeming the retirement benefit as a lump sum. However, once the reduction has been applied in a given year, any remaining amounts received in subsequent years shall be taxed without it.

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