Doctrine by topic · DGT Observatory

Notoriously Irregular Income: DGT doctrinal evolution

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

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How the DGT's position has evolved

Refined position High confidence 42 rulings · 2014–2026

Current position

The 30% reduction for notoriously irregular income is applicable when the amounts are imputed to a single tax period. It applies to compensation for the termination of the employment relationship by mutual agreement and to permanent disability benefits paid by the company. The prohibition on applying the reduction if other income with this benefit has been received in the previous five years does not affect those with a generation period of two years or more.

The DGT maintains the application of the reduction for cases such as permanent disability or termination by mutual agreement. A tightening in the interpretation of the requirements is observed, requiring that the receipt derives from the alteration or suppression of pre-existing working conditions. Finally, the scope of the five-year limitation regarding the generation period is specified.

Turning points

  1. V0858-20

    Establishes that the reduction requires the company to have altered, suppressed, or modified economic perceptions of indefinite duration or working conditions, excluding out-of-court settlements that do not stem from said modification.

  2. V5288-26

    Clarifies that the prohibition on applying the reduction due to having received other income with a reduction in the previous five years only affects income with a generation period exceeding two years.

Analysis based on 34 of 42 rulings with a stated position. Updated 23 September 2026.

Rulings on this topic

24
V5288-26 28 Jul 2026

30% reduction can be applied to irregular income from mutual agreement

SG de Impuestos sobre la Renta de las Personas Físicas
rendimientos del trabajoreducción del 30%período de generaciónnotoriamente irregularmutuo acuerdo LIRPF — Ley 35/2006 del IRPF art. 18.2RIRPF — RD 439/2007, Reglamento del IRPF art. 12.1.f
Affects CompanyExpat · Non-residentIndividual
V0105-26 21 Jan 2026

Degree project prize treated as professional income

SG de Impuestos sobre la Renta de las Personas Físicas
rendimientos de actividades económicaspremios científicoscesión de derechosnotoriamente irregularreducción del 30 por 100 LIRPF — Ley 35/2006 del IRPF art. 7.lLIRPF — Ley 35/2006 del IRPF art. 17.1
Affects CompanyExpat · Non-residentIndividual
V0369-25 20 Mar 2025

30% reduction possible on severance pay based on irregular earnings origin

SG de Impuestos sobre la Renta de las Personas Físicas
rendimientos del trabajoindemnización por despidomutuo acuerdoperiodo de generaciónnotoriamente irregular LIRPF — Ley 35/2006 del IRPF art. 17.2.aLIRPF — Ley 35/2006 del IRPF art. 18.2
Affects CompanyExpat · Non-residentIndividual
V2479-24 9 Dec 2024

No applies 30% reduction under art. 18.2 LIRPF for new transactional indemnity

SG de Impuestos sobre la Renta de las Personas Físicas
reducción del 30%periodo de generaciónindemnización por transacción globalrendimientos del trabajoacuerdo transaccional LIRPF — Ley 35/2006 del IRPF art. 18.2RIRPF — RD 439/2007, Reglamento del IRPF art. 12
Affects CompanyExpat · Non-residentIndividual
V1001-21 20 Apr 2021

30% tax reduction unavailable if severance pay is spread over several years

SG de Impuestos sobre la Renta de las Personas Físicas
reducción del 30%rendimientos del trabajoextinción de la relación laboralmutuo acuerdoperiodo impositivo LIRPF — Ley 35/2006 del IRPF art. 18.2RIRPF — RD 439/2007, Reglamento del IRPF art. 12
Affects CompanyExpat · Non-residentIndividual
V0704-20 3 Apr 2020

30% tax reduction not applicable to post-contractual non-compete compensation

SG de Impuestos sobre la Renta de las Personas Físicas
reducción del 30%pacto de no competencia poscontractualperíodo de generaciónrendimientos del trabajoextinción de relación laboral LIRPF — Ley 35/2006 del IRPF art. 18.2RIRPF — RD 439/2007, Reglamento del IRPF art. 12.1
Affects CompanyExpat · Non-residentIndividual
V1805-18 21 Jun 2018

Death benefits may be classified as employment income

SG de Impuestos sobre la Renta de las Personas Físicas
rendimientos del trabajoprestaciones por fallecimientonotoriamente irregularsubsidio por defunciónreducción del 30 por ciento LIRPF — Ley 35/2006 del IRPF art. 17RIRPF — RD 439/2007, Reglamento del IRPF art. 12.1.d
Affects CompanyExpat · Non-residentIndividual

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