5. Compensation for dismissal or termination of the employee

Note: In all cases, the enjoyment of this exemption is conditional on the real and effective disengagement of the worker from the company. It will be presumed, unless proven otherwise, that such disassociation does not occur when, within three years following the dismissal or termination, the employee 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 connection is defined based on the relationship of the partners or participants with the entity, the participation is equal to or greater than 25% (Art. 1 Regulation IRPF ).

Clarifications

• Article 1 of the Personal Income Tax Regulations does not limit the presumption of disassociation to the nature of the relationship, whether past or future, but rather refers in a generic manner to the circumstance that the worker "returns to provide services" to the same company or to another company linked to it, making it irrelevant whether the new provision of services falls within an employment relationship, common or special, or within a business or professional relationship. Therefore, it does not matter in any way that the previous relationship that is being terminated and for which the compensation is received is of an employment nature and the subsequent relationship 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 within three years following his dismissal or termination, the worker returns to provide services to the same company or to another company linked to it in the terms of the aforementioned provision, without it being necessary to assess 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) the Income Tax Law (Resolution of the TEAC of 22/04/2021, 2020 appeal for the unification of criteria).

• For the purposes of enjoying the exemption, the "actual and effective disassociation of the worker with the company" means that, after his dismissal or termination, he does not return to provide services to the company that, directly or indirectly, are related to the previous responsibilities assumed, corresponding to the proof of such circumstances to whoever was an employee of the same, in accordance with the interpretative criteria established in the Supreme Court Judgment number 276/2022, of March 4, of the Second Section of the Contentious-Administrative Chamber ( ROJ : STS 986/2022).