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Tax advantages of Pension Plans. Contributions

  • The amounts invested in a pension plan or PPA, in addition to accumulate capital for retirement, reduce the income tax base.
  • The maximum contribution limit is 8,000 per year.
  • The maximum contribution limit for disabled people with a degree of physical or sensory equal or greater than 65%, mental equal or greater than 33%, will be 24,250 euros per year. In addition, the contribution limit for a disabled person will be 8,000 euros per year.
  • The contributions reduce the taxable base in the smaller of the following two amounts:
    • 30% of the sum of net income from employment and economic activities perceived.
    • 8.000 euros per year.
  • In addition there are special cases where you can also reduce the tax base:
    • If contributions for the spouse, if he does not get any income whatsoever origin greater than 8,000 euros, the reduction limit will be 2,500 euros per year.
  • The returns are not subject to taxation until the person begins to receive the benefit.
  • In the Wealth Tax, the accumulated savings is tax exempted.

 

Charging of providing pension plans. Even when the 40% reduction

The benefits received by the beneficiaries of pension plans for any contingencies will be considered in the work performance in the IRPF, integrated into the Taxable Base of IRPF to 100%.

Keep in mind, that since January 1, 2015 it has been limited the period in which you can apply the 40% reduction on the consolidated rights derived from prior to 1/01/2007 contributions being as follows:

  • For contingencies produced from 2015, the 40% reduction may be applied in the year that bring it into existence the corresponding contingency, or in the following two years.
  • In the case of contingencies happened in the years 2011 to 2014, such reduction will be applied to benefits received until the end of the eighth year, following that in which it happened the contingency.
  • In the case of contingencies produced in 2010 or earlier, the reduction may be applied until December 31, 2018.

 

TABLE : 40% IMPLEMENTING PERIOD LIMIT

CONTINGENCY YEAR MAXIMUM TERM 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 OR FOLLOW 31/120º 2 YEARS