Doctrine by topic · DGT Observatory

Suspension of Contract: 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

Settled doctrine High confidence 8 rulings · 2015–2023

Current position

Compensations for the suspension of the employment relationship are considered income from employment. The exemption for dismissal does not apply because the suspension does not terminate the contract, nor does the 30% reduction for irregular income apply because the economic rights arise ex-novo from the agreement. In the scope of IVA (Value Added Tax), these amounts are not subject to the tax as they do not constitute consideration for an operation, but rather compensation for damages.

The DGT's position remains constant in classifying compensations for suspension as income from employment without tax benefits for irregularity or dismissal. Coherence is maintained between IRPF (Personal Income Tax) and IVA by considering that there is neither a provision of services nor an extinction of the employment relationship. The only recent novelty focuses on the presumption of a lack of effective severance for the exemption of indemnities.

Turning points

  1. V1048-23

    Introduces the presumption that there is no effective severance if the worker provides services again to the same company or an affiliated company within the following three years.

Analysis based on 8 of 8 rulings with a stated position. Updated 2 October 2026.

Rulings on this topic

8
V2339-15 24 Jul 2015

No reduction of 30% on suspension-related payments

SG de Impuestos sobre la Renta de las Personas Físicas
rendimientos del trabajoreducción del 30%suspensión de contratomutuo acuerdorenta irregular LIRPF — Ley 35/2006 del IRPF art. 7.eLIRPF — Ley 35/2006 del IRPF art. 17.1
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