A) Exempt amount: Limits

Compensation for dismissal or termination of the employee is exempt, with the following limits:

A. Up to the amount established as mandatory in the Workers' Statute, in its implementing regulations, or where applicable, in the regulations governing the execution of sentences .

However, it should be noted that Article 7.e) of the Income Tax Law establishes, as will be seen later, an exception in the case of collective dismissals for which a greater exemption is provided for than the amount of compensation established as mandatory in the Workers' Statute.

However, in order to declare exempt compensation for unfair dismissal or termination up to the amount established as mandatory in the Workers' Statute, we must differentiate between dismissals that occurred up to July 7, 2012 and those that originate after that date:

In the case of dismissals made up to 7 July 2012 severance pay is exempt when the employer so recognises at the time of notification of the dismissal or at any other time prior to the conciliation act, provided that the amount of the compensation does not exceed what would have corresponded if the dismissal had been declared unfair, and it is not a question of terminations by mutual agreement within the framework of collective plans or systems of incentivised redundancies (twenty-second transitional provision of the Personal Income Tax Law ).
In dismissals produced after July 7, 2012 , only compensation recognized in an act of conciliation or in a judicial resolution are exempt.
- For these purposes, it should be taken into account that article 63 of Law 36/2011, of October 10, regulating social jurisdiction requires, as a prerequisite for the processing of the judicial process, that an attempt at conciliation or, where appropriate, mediation be carried out before the corresponding administrative service (to be established in each Autonomous Community) or before the body that assumes these functions, which may be established through interprofessional agreements or collective agreements referred to in article 83 of the consolidated text of the Workers' Statute Law, as well as through professional interest agreements referred to in article 13 and article 18.1 of Law 20/2007, of July 11, of the Statute of self-employed workers ( BOE of July 12).

Precision: The consolidated text of the Workers' Statute Law is the one approved by Royal Legislative Decree 2/2015, of October 23 ( BOE of October 24).

B. However, the amount of exempt compensation will have a maximum limit of 180,000 euros . Therefore, although the total compensation does not exceed the amount stipulated in the Workers' Statute or in its implementing regulations, if it exceeds 180,000 euros, the excess will be subject to taxation, with the exceptions indicated below:

Exceptions:

Regulations: Twenty-second transitional provision.3 Law IRPF .

This limit of 180,000 euros will not apply:

To compensation for dismissals or terminations that occurred prior to August 1, 2014.
To compensation for dismissals that occur from that date when they derive from an approved employment regulation file, or a collective dismissal in which the opening of the consultation period had been communicated to the labor authority, prior to August 1, 2014 .

Note: When the amount of compensation received exceeds the amount that, in each case, is mandatory or the maximum limit of 180,000 euros, the excess is not exempt from IRPF and must be declared as personal work income, without prejudice to the legally established reduction for work income generated over a period of more than two years that may be applicable, where appropriate.