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V5253-16 13 December 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · rendimientos del trabajo

Compensations for contract suspension are not exempt and do not qualify for the 30% reduction

A worker requested clarification regarding the taxation of financial compensation received during a special voluntary leave of absence and the payment of their special social security agreement. The DGT ruled that amounts paid due to contract suspension are neither exempt indemnities nor irregular income, and that social security contributions paid by the company constitute benefits in kind.

The question raised

Classification and taxation of amounts received under Personal Income Tax.

The DGT's ruling

Compensations for the suspension of the employment relationship constitute earned income and do not benefit from the dismissal exemption, as the suspension does not terminate the contract. Furthermore, the 30% reduction for irregularity in time is not applicable, as the regulation refers to the termination of the employment relationship and not to its suspension. Finally, the contributions to the Special Social Security Agreement paid by the company constitute benefits in kind, although they are deductible.

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