Collective dismissal, and as the different compensatory variants that encourage legal compensation must be taxed, from the complement to the legal compensation for dismissal, compensation to Social Security, contributions to pension plans or even the establishment of special conditions in the contracting of financial products.
When a company considers initiating a collective dismissal procedure, in which after the consultation period an agreement is reached with the legal representation of the workers to create a program of incentivized leave, which provides for various scenarios that improve depending on the age and years of provision of services of the affected employees, the economic benefits to be paid by the worker by improving the compensation provided for in the Workers’ Statute; being able to be the following concepts, which will have a different treatment in the taxation in the IRPF:
– Severance pay. Compensation in the form of income or flat-rate, which is calculated according to the number of years of service in the company, to which is usually added an additional amount depending on the seniority.
– Financing of the cost of the Special Agreement with the Social Security.
– Contribution to employee pension plans
– Special conditions of financial products contracted by employees in force on the date of notification of dismissal or termination of the employment contract, among which are loans and mortgage loans, products to which preferential rates apply
- Severance pay:
Article 7 e) of Law 35/2006, of 28 November, on Personal Income Tax, hereinafter LIRPF, provides as follows:
“e) Compensation for dismissal or dismissal of the worker, in the amount established on a mandatory basis in the Workers’ Statute, in its implementing regulations or, where appropriate, in the regulations governing the execution of sentences, without being considered as such that established by virtue of an agreement, pact or contract.
Without prejudice to the provisions of the preceding paragraph, in the event of collective redundancies carried out in accordance with the provisions of Article 51 of the Workers’ Statute, or caused by the causes provided for in Article 52(c) of the aforementioned Statute, provided that, in both cases, they are due to economic causes, technical, organizational, production or force majeure, will be exempt the part of compensation received that does not exceed the limits established on a mandatory basis in the aforementioned Statute for unfair dismissal.
The amount of the exempt compensation referred to in this point shall be limited to the amount of EUR 180 000.”;
Therefore, the limit of the amount of the exempt compensation is set as the one established on a mandatory basis for unfair dismissal.
Consequently, the compensation paid for the termination of the employment relationship in the framework of the collective dismissal made, which includes the amounts that are satisfied as a complement, premiums for triennium and for voluntary affiliation to the program of incentivized leaves, will be exempt from the Tax with the limit of the minor of:
– the amount established on a mandatory basis in the Workers’ Statute for unfair dismissal (33 days per year of service with a maximum of twenty-four monthly payments, according to the wording of article 56.1 of the Workers’ Statute, applicable to contracts signed from 12 February 2012, and, for contracts concluded before 12 February 2012, the limits provided for in the aforementioned fifth transitional provision of Law 3/2012).
– the amount of 180,000 euros.
If the compensation paid exceeds the amount that would result from applying the above criteria, the excess will be subject and not exempt, qualifying as work performance, and may result in the application of the percentage reduction of 30 per 100 provided for in article 18.2 of the LIRPF.
- Special agreement with the Social Security.
Established in article 51 of the ET, for cases of collective dismissals that include workers of 55 years or more, the company will have the obligation to pay the contributions destined to a special agreement, which according to the thirteenth additional provision of the consolidated text of the General Law of Social Security, until the worker reaches the age of 63 or in some cases 61, from that moment the contributions of the special agreement will be obligatory and at your exclusive expense.
The contributions that, according to the above, are the exclusive responsibility of the employer, have no impact on the settlement of the Income Tax of the Individuals of the workers neither as income nor as a deductible expense for the determination of the net income of the work.
On the contrary, in cases where the obligation to contribute corresponds to the worker, the amounts paid by the company to satisfy social security contributions would constitute remuneration in kind for work.
- Financial compensation: contribution to employees’ pension plans.
Regarding the contributions made by the company that initiates the collective dismissal to pension plans of employees who have terminated their employment relationship, in accordance with article 17.1 e) of the LIRPF, such contributions are considered full income from work.
These contributions are classified as full income from work in kind, in accordance with the provisions of article 42.1 and 43.1.1º.e) of the LIRPF.
Therefore, the contributions made by the promoter to the pension plan are considered full income from work for the participant, are valued by the amounts made and there is no obligation to make any deposit on account by the promoter of the plan.
- Special conditions of financial products contracted by employees in force on the date of notification of dismissal or termination of the employment contract, among which are loans and mortgage loans, products to which preferential rates apply
In accordance with the configuration of income in kind, established in the aforementioned article 42.1 of the LIRPF, and not being the case consulted among those that section 2 of the same article 42 determines that they are not considered income from work in kind, the special conditions that the company can offer to its employees in relation to different financial products among which are loans and mortgage loans, they constitute for them an income from work in kind, fully subject to the tax and its system of withholdings and income on account.
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