Specific limits
For income derived from the termination of an employment relationship, common or special, or from the commercial relationship with administrators and members of the Boards of Directors and other members of other representative bodies
In cases of termination of the employment relationship, common or special, or of the commercial relationship with administrators and members of the Board of Directors, and other members of other representative bodies, or both, occurring after January 1, 2013, the following additional specific limits are established for the application of the 30% reduction, without prejudice to the general annual joint limit of 300,000 euros.
|
Note to the table: (*) RT = arithmetic sum of such employment income from the same company, or from other companies in the group, regardless of the number of tax periods to which they are attributed. (Back) |
|
| Amount of irregular work income | Limit on which to apply the 30% reduction |
|---|---|
| Between 700,000.01 and 1,000,000 euros | 300,000 - (RT - 700,000) (*) |
| More than 1,000,000 euros | 0 euros |
For the application of this limit, the total amount of work income to be computed will be determined by the arithmetic sum of the work income indicated above from the company itself or from other companies in the group of companies in which the circumstances provided for in article 42 of the Commercial Code occur, regardless of the number of tax periods to which they are attributed .
Remember : These specific limits are not applicable to employment income derived from the termination of employment or commercial relationships that occurred prior to January 1, 2013 (twenty-fifth transitional provision of the Tax Law).
It should also be noted that in the case of income derived from the termination of an employment relationship, whether common or special, for the purposes of applying the additional specific limits, the amount of income to be computed will be the excess over the exempt limit.
Example:
Mr RTL was fired on 3 January 2019. As a result of the above, he has received compensation of 550,000 euros from the company, of which 200,000 euros correspond to the amount established as mandatory in the Workers' Statute for unfair dismissal. Calculate the applicable reduction
Solution :
- Amount received: 550,000
- Amount established as mandatory by the Workers' Statute: 200,000
-
Maximum amount of exempt compensation: 180,000
Amount exempt from tax: 180,000 - Total taxable income (550,000 – 180,000) = 370,000 (*)
- Applicable reduction (30% s/ 300,000) (**) = 90,000
- Income to be included in the tax base (370,000 – 90,000) = 280,000
For income derived from the exercise of stock or participation purchase options granted by employees before January 1, 2015
In this case (income from work derived from all purchase options granted prior to January 1, 2015), without prejudice to the application of the joint annual limit, the limit provided for in article 18.2.b) of the Personal Income Tax Law will apply in its version in force on December 31 .
This limit consisted in that the amount of income to which the reduction was applied could not exceed the amount resulting from multiplying the average annual salary of all declarants in the IRPF , which will be 22,100 euros, by the number of years of generation of the income.
Regarding the average annual salary of all tax filers, see the sixteenth transitional provision of the IRPF Regulations .
This limit was doubled when such returns met the following requirements:
- The shares or interests acquired must be held for at least three years from the date of exercise of the purchase option.
- The offer of purchase options is made under the same conditions to all employees of the company, group or subgroups of the company.
In general plans for the delivery of purchase options on shares or interests, failure to comply with the requirement of maintaining the acquired shares or interests for at least three years will result in the obligation to submit a supplementary self-assessment, including late payment interest, within the period between the date on which the requirement is not met and the end of the regulatory declaration period corresponding to the tax period in which said failure occurs (seventeenth transitional provision of the Regulation).