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V3206-17 14 December 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · indemnización por despido

Redundancy payments may lose tax exemption if the employee returns to the same company within three years

A worker inquired whether her redundancy payment was exempt from Income Tax after being rehired shortly after her dismissal. The DGT indicates that the exemption depends on whether there was a genuine severance of the employment relationship with the company.

The question raised

Whether the severance payment received on December 31, 2015, due to the termination of her contract, is exempt from taxation.

The DGT's ruling

The exemption of severance payments requires the real and effective termination of the employment relationship between the worker and the company. It is presumed that no termination has occurred if the worker provides services again to the same company or to a related entity within the following three years. If the worker cannot prove that the termination was effective, they must include the severance payment in their personal income tax return.

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