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V4869-16 11 November 2016 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · planes de pensiones

40% reduction applicable to pension plan benefits received as a lump sum

The inquirer asks whether the transitional regime reduction can be applied to a pension plan benefit received through a mixed payment (lump sum and annuity). The Directorate General for Taxes (DGT) rules that the 40% reduction applies to the lump sum portion corresponding to contributions made up to 2006.

The question raised

Tax treatment applicable to Personal Income Tax. In particular, the possibility of applying the reduction provided for in the transitional regime to the amount received as a lump sum.

The DGT's ruling

The 40% reduction may be applied to the portion of the benefit received as a lump sum, provided that it corresponds to contributions made until December 31, 2006, and the terms of the twelfth transitional provision are met. If the benefit is mixed, the reduction only affects the portion received as a lump sum. This reduction may only be applied once, to the amounts received within the same tax period.

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