B) Benefits in the form of capital derived from public social security schemes

Regulations: Art. 18.3 Law IRPF and 12.3 Regulation IRPF

Taxpayers may apply a reduction of 30 percent to the following benefits, provided that they are received in the form of capital, consist of a single payment and more than two years have passed since the first contribution. The two-year period is not required in the case of disability benefits:

1. The pensions and passive assets received from the public Social Security and Passive Classes regimes and other public benefits not exempt due to situations of disability, retirement, accident, illness, widowhood or similar .

   Precision: However, when pensions or similar benefits are received from previous periods, or supplements or surcharges thereof from such periods, because a court ruling has so recognized, the amounts received from previous periods, when the periods concerned exceed two years, are not subject to the reduction in article 18.3 of Law 35/2006, but to the reduction in article 18.2 of the Personal Income Tax Law . See the Resolution of the Economic-Administrative Court (TEAC) of June 1, 2020, Claim number 00/03228/2019, issued in an appeal for the unification of criteria.

   In accordance with the above, the reduction in article 18.2 of the Personal Income Tax Law is operative with respect to pensions and passive assets of the public Social Security regimes and passive classes and other public benefits for situations of disability, retirement, accident, illness, widowhood, or similar, when they are recognized by a court ruling and cover more than two years.

2. Benefits received by the beneficiaries of compulsory general mutual funds for public officials, orphanages and other similar entities .

In the case of mixed benefits, which combine income of any type with a single payment in the form of capital, the reduction referred to will only be applicable to the payment made in the form of capital.