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V3347-23 29 December 2023 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

40% reduction on pension plan benefits applicable if received within the legal timeframe

A taxpayer inquired whether the 40% reduction for contributions made prior to 2007 could be applied to pension and insured foresight plans upon retirement in 2023. The Directorate General for Taxes (DGT) ruled that this is possible, provided the deadlines set out in the twelfth transitional provision are met and the benefit is received as a lump sum.

The question raised

Question posed: Possibility of applying the 40 percent reduction provided for in the transitional regime in the following cases:

The DGT's ruling

Benefits from pension plans and insured provident funds are considered income from employment. If received as a lump sum, the 40% reduction may be applied to the portion corresponding to contributions made up to December 31, 2006, provided that two years have elapsed since the first contribution and it is received within the period established by the twelfth transitional provision. For the same contingency, the reduction may only be applied to one of the benefits received as a lump sum, although the taxpayer may choose the tax year in which to apply it within the permitted period. If the contingency occurs in 2023, the period for applying the transitional regime ends on December 31, 2025.

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