The 30% reduction for irregular income can be applied even if the benefit was previously used

The application of the 30% reduction on employment income received irregularly is a frequent point of debate in the management of Personal Income Tax (IRPF). Recently, the Directorate General of Taxes (DGT) has clarified the conditions under which this tax benefit can be used successively.

What the DGT has ruled

The inquiry analyzes whether a taxpayer can apply the reduction provided for in Article 18.2 of the Law 35/2006 (LIRPF) to a severance payment received through the mutual termination of an employment relationship, having already applied said reduction in a previous tax year for a different concept, such as a seniority bonus.

The DGT's criteria establish that the prohibition on applying the reduction if other income with this benefit has been received in the previous five years only applies to income with a generation period exceeding two years. However, amounts received through the mutual termination of an employment relationship are considered income obtained in a notoriously irregular manner, according to Article 12.1 f of the RIRPF. Therefore, as they are not income with a generation period exceeding two years, they are not affected by the five-year limitation.

What this means for you

For workers receiving severance payments by mutual agreement or severance plans, this ruling provides legal certainty. It means that having enjoyed the 30% reduction in previous years for other concepts (such as seniority bonuses or extraordinary bonuses) does not prevent them from applying this tax benefit to their current severance payment, provided that it is imputed in a single tax period.

What you should do

Upon receiving a severance payment by mutual agreement, it is necessary to verify that the concept meets the nature of notoriously irregular income. You must ensure that the amount is imputed entirely in the tax year in which it is received to maintain the application of the 30% reduction established in the current regulations.