Summary table

In general

• That the returns have a generation period of more than 2 years.
• That the income is allocated in a single tax period.
• That within the period of the 5 tax periods prior to the one in which they become payable, the taxpayer had not obtained other income with a generation period greater than two years to which the reduction would have been applied.

• The amounts paid by the company to employees due to the transfer to another workplace, which exceed the amounts provided for in article 9 of the Personal Income Tax Regulations.
• Compensations derived from public Social Security or Passive Classes regimes, as well as benefits paid by orphan schools and similar institutions, in cases of non-disabling injuries.
• Benefits paid for non-disabling injuries or permanent disability, in any degree, by companies and public entities.
• Death benefits, and funeral or burial expenses that exceed the limit declared exempt, of workers or officials, both those of a public nature and those paid by orphan schools and similar institutions, companies and public entities.
• The amounts paid in compensation or reparation for salary supplements, pensions or annuities of indefinite duration or for the modification of working conditions.
• The amounts paid by the company to the workers for the resolution, by mutual agreement, of the employment relationship.
• Literary, artistic or scientific prizes that do not enjoy exemption from this tax.

For income derived from the termination of an employment relationship, common or special:

• The generation period will be considered the number of years of service of the worker.
• These returns can also be collected in fractions.

  In this case, the 30% reduction will only be applicable when the quotient resulting from dividing the number of years of generation, computed from date to date, by the number of tax periods of fractionation, is greater than two.

• The taxpayer can apply the reduction, even if within the period of the previous 5 tax periods he had obtained other income with a generation period greater than 2 years, to which the reduction provided for in this section would have been applied.

Transitional scheme

• For income received in installments before January 1, 2015 that does not come from compensation for termination of the employment relationship, common or special, or the commercial relationship.
• For income received in fractions derived from the termination prior to August 1, 2014 of the commercial relationship with administrators and members of the Boards of Directors, and other members of other representative bodies.
• For income derived from the exercise of purchase options on shares or participations by workers granted before January 1, 2015.

A) Joint annual limit:

300,000 euros per year 

This limit operates on the sum of full returns that have a generation period of more than two years, as well as those that are legally classified as obtained in a notoriously irregular manner over time.

B) Additional specific limits for certain returns with a generation period of more than two years, other than those derived from social security systems, without prejudice to the general limit indicated in letter A):

• For income derived from the termination of a common or special employment relationship or commercial relationship with administrators and members of the Boards of Directors and other members of other representative bodies:

  The limit over which to apply the reduction based on the amount of irregular work income obtained will be:

  • Between 700,000.01 and 1,000,000 euros: 300,000 - (RT - 700,000)
  • More than 1,000,000 euros: 0 euros
• For income derived from the exercise of purchase options on shares or participations by employees granted before January 1, 2015:

  The amount of the return may not exceed 300,000 euros, or, if it is lower, the amount resulting from multiplying the average annual salary of all the taxpayers in personal income tax (22,100 euros), by the number of years of generation of the return, and may said limit will be doubled in the cases reflected in the corresponding limits section.