Doctrine by topic · DGT Observatory

Effective severance: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

← DGT Observatory

How the DGT's position has evolved

Refined position High confidence 10 rulings · 2014–2025

Current position

The exemption of severance pay requires a real and effective severance of the worker. It is presumed that such severance does not exist if the worker provides services to the same company or to a related company within three years following the dismissal, although evidence to the contrary is admissible. However, this severance criterion is not applicable to severance payments for the termination of fixed-term contracts or for the expiration of time or completion of work.

The DGT's position has remained constant regarding the presumption of lack of severance due to re-hiring within a three-year period. The only relevant evolution is the clarification introduced in 2023, which clarifies that this severance criterion does not apply to severance payments for the end of a fixed-term contract.

Turning points

  1. V1504-23

    Establishes that the criterion of real and effective severance is not applicable to severance payments for the termination of fixed-term contracts or for the expiration of time or completion of work.

Analysis based on 10 of 10 rulings with a stated position. Updated 28 September 2026.

Rulings on this topic

10
V2293-25 25 Nov 2025

Rehiring within three years of dismissal presumed to lack effective separation

SG de Impuestos sobre la Renta de las Personas Físicas
indemnización por despidodesvinculación efectivapresunción de desvinculaciónperiodo de generaciónreducción del 30% LIRPF — Ley 35/2006 del IRPF art. 7.eLIRPF — Ley 35/2006 del IRPF art. 18.2
Affects CompanyExpat · Non-residentIndividual
V1504-23 2 Jun 2023

Severance pay for fixed-term project contracts is not exempt from Income Tax

SG de Impuestos sobre la Renta de las Personas Físicas
indemnización por despidoexención de rentascontrato de duración determinadafinalización de obradesvinculación efectiva LIRPF — Ley 35/2006 del IRPF art. 7.eRIRPF — RD 439/2007, Reglamento del IRPF art. 1
Affects CompanyExpat · Non-residentIndividual

Apply this to your case

Beckham Law & impatriate taxationTalk to the team applying this doctrine daily.
IRPF Spain 2026 CalculatorEstimate the impact on your case in two minutes.
Talk to the tax teamWe check whether this criterion affects you and what it means in your situation.
Email
Contact