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V3174-20 22 October 2020 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

Pension plan benefits taxed as employment income in the general tax base

A taxpayer queried how pension plan benefits are taxed when rights are exercised. The Directorate General for Taxes (DGT) ruled that these amounts constitute employment income and must be included in the general tax base.

The question raised

Taxation of the benefit received as a beneficiary of the pension plan.

The DGT's ruling

Pension plan benefits are considered income from employment and are taxed entirely within the general tax base, regardless of whether the contributions were deducted in previous fiscal years. The 40% reduction may only be applied to benefits received as a lump sum corresponding to contributions made until December 31, 2006, provided that the terms and requirements of the twelfth transitional provision of the LIRPF are met.

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