Taxes

loader Cargando...

Pension plans

TAXES ON CONTRIBUTIONS

The entire contribution to the plan will be reduced to the general taxable base (with all this implies for tax savings), according to the established limits, but only as long as it does not exceed the following percentages of Gross Income from work and professional activities:

Fiscal savings limits
Age Annual Limit on Fiscal Savings per contribution
For any age 30% of net income from employment and business and professional activities (max. €8,000)

Therefore, the lesser of both amounts can be reduced: the contribution limit set by law, or the % of Net Income from work and business and professional activities.

In the case of the amount of the contribution exceeding the amount of this general part, it can still be reduced by the other part making up the Taxable Base, called Income from Savings, while it cannot in any case produce a Negative Liquidable Base (General or Savings).

TAXES ON BENEFITS RECEIVED

The benefits paid are included under the General section of your taxable base income and are taxed as just another source of income for the year in the form of Income from Employment, in other words, at the rate shown in the tables published for the year.

Fiscal treatment is the same regardless of whether the benefits are collected in the form of a regular Income or a Lump Sum: the entire amount received every year is taxed as employment earnings.

If the pension plan benefits are received by a beneficiary on the death of the policy holder, the beneficiary's income tax benefits will be taxed as employment income and not under Inheritance and Gift Tax.

Provisional regime for Pension Plans taken out prior to the date the law entered into force (01/01/2007):

  • New contingencies (occurring as of 1st January 2015): When the benefits are collected in the form of a lump sum on account of any of the contingencies provided for (death, permanent disability, severe dependence or major dependence), the beneficiaries may apply the financial regime and, if applicable, the reduction set out in the Income Taxation Act in force on 31st December 2006 (40% reduction) for rights generated through contributions made prior to 31st December 2006, providing the benefits are collected for the year in which the corresponding contingency occurs, or in the following two years.
  • Old contingencies (occurring prior to 1st January 2015): When the benefits are collected in the form of a lump sum on account of any of the contingencies provided for (death, permanent disability, severe dependence or major dependence), the beneficiaries may apply the financial regime and, if applicable, the reduction set out in the Income Taxation Act in force on 31st December 2006 (40% reduction) for rights generated on account of contributions made prior to 31st December 2006, in accordance with the following stipulations:
    • Contingencies occurring between 2011 and 2014, the provisional regime can only be applied, if applicable, to benefits received up to the end of the eighth year following the year in which the corresponding contingency occurred.
    • Contingencies occurring in 2010 or before, the provisional regime can only be applied, if applicable, to benefits received up to 31st December 2018.

Deadline for benefits collection according to year of contingency
Year contingency occurred Deadline for benefits collection with 40% reduction
2010 or before 31/12/2018
2011 31/12/2019
2012 31/12/2020
2013 31/12/2021
2014 31/12/2022
2015 onwards 31/12 + 2 years