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V3233-17 15 December 2017 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · contingencia de jubilación

Retirement contingency for applying the 40% reduction occurs upon accessing total or partial retirement

The inquirer asks when the retirement contingency is deemed to have occurred for the purpose of applying the 40% reduction to pension plan payouts. The Directorate General of Taxes (DGT) responds that the contingency occurs upon accessing total retirement or, if benefit payments commence earlier, upon accessing partial retirement.

The question raised

If the pension plan benefit is received as a lump sum and for the purposes of applying the 40 percent reduction provided for in the transitional regime, when is the retirement contingency considered to have occurred.

The DGT's ruling

To apply the transitional regime and the 40% reduction, the retirement contingency generally occurs at the time of accessing full retirement. However, if the retirement benefit is received or the collection of the retirement benefit is initiated prior to full retirement, the contingency is considered to have occurred at the time of accessing partial retirement. The determination of retirement is governed by the provisions of the corresponding Social Security regime.

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