H) Exempt compensation derived from the termination of special labor relationships

a. Senior management staff

Regulations: Articles 2.1.a) Workers' Statute and 11 of Royal Decree 1382/1985, of August 1, regulating the special employment relationship of senior management personnel (BOE of 12)

In the case of senior management personnel, the employment contract may be terminated for the reasons and through the procedures provided for in the Workers' Statute, except for the following special circumstances established in article 11 of Royal Decree 1382/1985, of August 1:

1. Termination of the contract due to withdrawal by the employer. 

   In these cases, the senior manager will be entitled to the compensation agreed in the contract and, in the absence of an agreement, the compensation will be equivalent to seven days of salary in cash per year of service with a limit of six monthly payments.

   The amount of compensation set for these cases ( 7 days with a maximum of 6 monthly payments ) is considered as a mandatory minimum and, therefore, exempt from personal income tax, in accordance with the interpretative criteria established in judgment 1528/2019, of November 5, of the Second Section of the Contentious-Administrative Chamber of the Supreme Court.

   It should be noted that the ruling of Sentence 1528/2019 is based on the doctrine set forth in the ruling of the Plenary Session of the Social Chamber of the Supreme Court of April 22, 2014 (cassation for the unification of doctrine 1197/2013) which considered that the compensation of seven days of salary in cash per year of service with the limit of six monthly payments set out in article 11.1 Royal Decree 1382/1985, is a "minimum necessary right, not available" and, therefore, mandatory, even in cases where the termination of the contract without compensation had been agreed.

2. In the event of dismissal declared unfair , and in accordance with the previous interpretative criterion, the part of compensation that does not exceed the minimum mandatory amount provided for in section 2 of the aforementioned article 11 of Royal Decree 1382/1985, of August 1, is considered exempt ( 20 days of salary in cash per year of service and up to a maximum of 12 monthly payments).

b. Professional sportsmen

Regulations: Articles 2.1.d) Workers' Statute and 15 of the aforementioned Royal Decree 1006/1985, of June 26, regulating the special employment relationship of professional athletes (BOE of the 27th)

In the event of unfair dismissal, athletes with special employment relationship (Royal Decree 1006/1985, of June 26) are entitled to a guaranteed minimum compensation of at least two monthly payments of their regular remuneration, plus the corresponding proportional part of the quality and quantity of work supplements received during the last year, with periods of time less than a year being prorated by months.

The compensation received by them is considered to be exempt from article 7.e) of the Income Tax Law up to the amount corresponding to said limit (two per worked)

c. Household employees

Regulations: Articles 2.1.b) Workers' Statute and 11 of Royal Decree 1620/2011, of November 14, regulating the special employment relationship of the family home service ( BOE of the 17th)

In the case of employees in the family home service (special employment relationship regulated by Royal Decree 1620/2011, of November 14) the cause of termination or dismissal must be distinguished:

If the contract is terminated due to the employer's withdrawal, the exempt compensation is:

• For contracts signed after January 1, 2012, 12 calendar days per year of service, with a limit of 6 monthly payments
• For contracts prior to that date, 7 days per year with a limit of 6 monthly payments .

If it is a case of unfair dismissal, the exempt compensation will be 20 calendar days per year of service, with a of 12 monthly payments.