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V4130-15 22 December 2015 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del trabajo

The 40% pension plan reduction applies only to lump-sum payments received within a single tax year

The inquirer asks whether they can receive the remainder of their pension plan entitlements as a lump sum to benefit from the 40% reduction. The Directorate General for Taxes (DGT) responds that this reduction can only be applied to amounts collected as a lump sum within the same tax period.

The question raised

Possibility of receiving the remaining economic rights of the plan as a lump sum, with the right to apply the 40 percent reduction.

The DGT's ruling

Pension plan benefits are considered income from employment. The 40% reduction is only applicable to the portion of the benefit corresponding to contributions made until December 31, 2006, provided that it is received as a lump sum or a mixed payment. This reduction may only be granted to amounts received within the same tax year, at the taxpayer's discretion. The remaining amounts received in other years shall be taxed in full without said reduction.

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