The Treasury will have to accept second rectifications of IRPF from mutual fund members

The Central Economic-Administrative Court (TEAC) has given a blow to the Tax Agency and obliges it to admit second rectifications by taxpayers of their personal income tax settlements in order to make the corresponding refunds for contributions to former occupational mutual societies.
It should be remembered that the part of the retirement benefit that corresponds to contributions made to mutual societies between:

• 1967 and 1978 is only taxed at 75%,
• while that corresponding to contributions made prior to 1967 is 100% exempt from taxation.

The case

A taxpayer who initially asked the Tax Agency to rectify his income tax returns from 2014 to 2017 so that he could be refunded the excess income tax he had paid on the part of his pension corresponding to contributions to former mutual funds. The person indicated that this part of the benefit should only be taxed at 75% and not 100%. The correction was accepted.
However, years later, after the TEAC issued a new criterion in 2020 in which it concluded that the part of the pension corresponding to the contributions to the mutual societies made before 1967 was 100% exempt from taxation, the taxpayer filed a second rectification of the settlement with the Inland Revenue claiming this adjustment, which, however, was rejected.
The Economic-Administrative Court of Galicia upheld the taxpayer’s claim, but the Director of the Management Department of the Tax Agency asked the TEAC to unify criteria and conclude that a second rectification request cannot be admitted when there was already a first one.
The court, on the other hand, dismissed the Tax Agency’s claim and forced the second request to be upheld, since the rectification was based on a different reason, and therefore the first decision was not final.

Conclusion

Although it may seem that the first and second rectifications are asking for something identical, that the adjustment in the IRPF for contributing to the former mutual funds be applied to the pension, they are different things.
If you have any doubts regarding this issue, please do not hesitate to contact us, by telephone to Úrsula Olivares Lamela or by email to uol@btsasociados.com or to Carles Monfort Codina cmc@btsasociados.com. We will be delighted to help you.