5. Compensation for dismissal or dismissal of the worker
Regulations: Articles 7.e) Law Personal Income Tax ; 1 and 73 of the Personal Income Tax Regulations
Note: In all cases, the enjoyment of this exemption is conditional on the real and effective separation of the worker from the company. It will be presumed, unless proven otherwise, that said separation does not occur when in the three years following the dismissal or termination the worker returns to provide services to the same company or to another company linked to it, in the terms provided for in article 18 of the Corporate Tax Law, provided that in the case in which the relationship is defined based on the relationship of the partners or participants with the entity, the participation is equal to or greater than 25 percent (art. 1 Personal Income Tax Regulation).
Article 1 of the Personal Income Tax Regulations does not limit the presumption of separation to the character or nature of the relationship, both past and future, but rather refers generically to the circumstance that the worker "returns to providing services" to the same company. or to another linked to it, making it immaterial whether the new provision of services is framed in an employment relationship, common or special, or in a relationship of a business or professional nature. Therefore, it does not affect anything that the previous relationship that is extinguished and for which the compensation is received, is of a labor nature and the subsequent one that the worker maintains with the company is of a commercial nature.
For the application of the presumption of article 1 of the Regulation, it is sufficient that in the three years following his dismissal or termination the worker returns to provide services to the same company or to another company linked to it under the terms of the aforementioned provision, without it being necessary the appreciation of a fraudulent purpose in the new provision of services. Consequently, the absence of fraudulent intent in the new relationship with the same company or another related company does not entail the automatic application of the exemption established in article 7.e) of the Personal Income Tax Law (Resolution of TEAC of 04/22/2021, Claim number 00/02016 /2020, relapse into extraordinary appeal raised for the unification of criteria).
- A) Exempt amount: Limits
- B) Cases that are not considered covered by the exemption
- C) Exempt compensation derived from dismissals classified as unfair
- D) Exempt compensation derived from termination of the contract at the will of the worker (cessation)
- E) Exempt compensation derived from collective dismissals due to economic, technical, organizational, production or force majeure causes
- F) Exempt compensation derived from the termination of the employment relationship due to death, retirement or disability of the employer
- G) Exempt compensation derived from the termination of the employment contract for objective causes
- H) Exempt compensation derived from the termination of special labor relationships
- Summary table