4. Specific limits

4.1. For income derived from the termination of an employment relationship, common or special, or from the commercial relationship with administrators and members of the Boards of Directors and other members of other representative bodies

Without prejudice to the general annual limit of 300,000 euros, in cases of termination of the employment relationship, common or special, or of the commercial relationship with directors and members of the Board of Directors, and other members of other representative bodies, or both, occurring after January 1, 2013, in which the amount of employment income derived from the termination exceeds 700,000 euros the following specific limits are established for the application of the 30% reduction.

Amount of irregular work income	Limit on which to apply the 30% reduction
Note to the table: ^(*)RT = arithmetic sum of such employment income from the same company, or from other companies in the group, regardless of the number of tax periods to which they are attributed. ^(Back)
Up to 700,000 euros	Joint annual general limit = 300,000 euros
Between 700,000.01 and 1,000,000 euros	300,000 - (RT - 700,000) ^(*)
More than 1,000,000 euros	0 euros

For the application of these limits, the total amount of work income to be computed will be determined by the arithmetic sum of the work income indicated above from the company itself or from other companies in the group of companies in which the circumstances provided for in article 42 of the Commercial Code occur, regardless of the number of tax periods to which they are attributed .

Remember : These additional limits specific They are not applicable to the income from work that derives from the termination of employment or commercial relationships, produced before January 1, 2013 (twenty-fifth transitional provision of the Law of PIT).

It should also be noted that, in the case of income derived from the termination of an employment relationship, whether common or special, for the purposes of applying the additional specific limits, the amount of income to be computed will be the excess over the exempt limit.

Example:

Mr. RTL was fired on January 3, 2024. As a result of the above, he has received compensation of 550,000 euros from the company, of which 200,000 euros correspond to the amount established as mandatory in the Workers' Statute for unfair dismissal. Calculate the applicable reduction.

Solution :

Amount received: 550,000

Amount exempt from tax: 180,000

The lesser of:

Amount established as mandatory by the Workers' Statute: 200,000
Maximum amount of exempt compensation: 180,000

Total taxable income (550,000 – 180,000) = 370,000

Note: The excess compensation over the exempt limit (i.e., 370,000 euros) is subject to taxation as employment income.

Applicable reduction (30% s/ 300,000) = 90,000

Note: Since the amount of taxable income is less than 700,000 euros, the reduction is applied with the overall annual general limit of 300,000 euros.

Income to be included in the tax base (370,000 – 90,000) = 280,000

4.2. For income derived from the exercise of stock or participation purchase options granted by employees before January 1, 2015

In this case (income from work derived from all purchase options granted prior to January 1, 2015), without prejudice to the application of the joint annual limit (300,000 euros), the limit provided for in article 18.2.b) 1 of the Law of the PIT in its version in force on December 31, 2014.

This limit consisted in that the amount of income on which the reduction was applied could not exceed the amount resulting from multiplying the average annual salary of all the declarants in the PIT, which will be 22,100 euros, for the number of years of generating the income.

Regarding the average annual salary of the group of declarants of the PIT, see the sixteenth transitional provision of the Regulations of the PIT.

This limit was doubled when such returns met the following requirements:

The shares or interests acquired must be held for at least three years from the date of exercise of the purchase option.
The offer of purchase options is made under the same conditions to all employees of the company, group or subgroups of the company.

In general plans for the delivery of purchase options on shares or participations, failure to comply with the requirement of maintaining the acquired shares or participations for at least three years will lead to the obligation to submit a supplementary self-assessment, including late payment interest, within the period between the date on which the requirement is not met and the end of the regulatory declaration period corresponding to the tax period in which said non-compliance occurs (seventeenth transitional provision of the Regulation of the PIT).