Skip to content
Back to index
V3185-20 22 October 2020 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · contingencia de jubilación

40% pension plan reduction applicable if received within the legal timeframe following retirement

A taxpayer inquired whether the 40% reduction could be applied to contributions made before 2007, following a pension plan payout request in 2019. The Directorate General of Taxes (DGT) clarified that the reduction depends on whether the benefit is received within the specific timeframes established according to the year in which the retirement contingency occurred.

The question raised

Possibility of applying the 40 percent reduction.

The DGT's ruling

The 40% reduction is applicable to lump-sum benefits corresponding to contributions made until December 31, 2006, provided they are received within the period established by the twelfth transitional provision of Law 35/2006. This period depends on the fiscal year in which the retirement contingency occurred, which is understood to have occurred when the participant effectively accesses retirement under the Social Security regime. If lump sums are received in different fiscal years, the reduction may only be applied once, at the taxpayer's discretion, within the same tax period.

Book your free first meeting