How is the taxation in the contributions?

How is the taxation in the contributions?

The contributions to the different Forecast Systems have as main advantage the fiscal deferral, that is, the fact of delay the tax payment at once in which happens the charge of our consolidated rights, commonly known as the moment of the “rescue of the pension plan ”.

Additionally, the fact of carry out voluntary contributions to our vehicle of social security complementary us allows pay fewer taxes in the annual tax return of the exercise in which happens this contribution. Why? Because the voluntary contributions reduce the Basis Of assessment on the one which calculates our fiscal bill.

Suppose that have a gross pay of 30,000 € and contributes to a Pension plan €1,000

  • Earned income: €30,000
  • General basis Of assessment: €30,000
  • Reduction of the General Basis Of assessment:
    • Aporaciones to Systems of Social Security: €1,000
  • General tax Basis: €29,000
  • Calculate Tax: €4,658.6

The € 1,000 contributed to the Pension plan not pays taxes for PERSONAL INCOME TAX porlo that you save the Marginal Type of PERSONAL INCOME TAX that in this case are €280.90

The sum of all the income for earned incomes generate the so-called General Basis Of assessment, that after take away the reductions (contributions to Systems of Social Security), give as a consequence the General Tax Basis from which calculates the fee to be paid of the tax. 

The maximum limit legal for the contributions to a Pension plan is of 8,000 euros regardless of the age that has. However, and although the limit of yearly contribution to the set of the Pension plans of which is participant a person ascends to this amount, the limit of fiscal reduction depend on the fiscal residence of the participant, just as points out next:

Fiscal residence in Common Territory

The maximum limit set of reduction for the total of the contributions and contributions is the minor of the next amounts:

  • 30% of the sum of the Net Yield of the Work and of Economic Activities perceived individually in the exercise 
  • 8,000 Euros.

For tax reduction purposes, the contributions of the Sponsor (company) and those of the Participant (to this plan or any other pension plan for which the Participant or sponsor company is a holder) are calculated independently. The contributions that not can be object of reduction for exceed the limits previous, be able to be reduced in the five next exercises. 

In the case of participants with disability (physical disability or sensory equal to or more than 65%, disability psychic equal to or more than 33% or the declared ones judicially), the limit expands to 24,250 euros. The people with degree of kinship (spouse, relative or guardian) with the participant with disability be able to expand in 10,000 euros your limit of contributions, being this extension intended for carry out contributions in the plan of the participant with disability. Nevertheless, the set of practised reductions by all the people that carry out contributions in favor of self disabled person, included those ones of the disabled person, not be able to exceed of 24,250 euros a year.

Moreover, is possible carry out contributions in favor of the spouse provided that this obtains incomes of the work or of economic activities lower than 8,000 euros a year. In this case, the limit of contribution and desgravación be of 2,500 euros a year.

The limits exposed previously are implementable jointly to all the individual retirement accounts, partners and of employment, guaranteed pension plans, employee pension plans social business and insurance private that cover exclusively the risk of severe premise or high dependency, as well as to benefit societies of social security.

Fiscal residence in Álava, Vizkaya and Gipuzkoa

The maximum limits of tax deduction are:

  • Personal contributions: 5,000 euros
  • Business contributions: 8,000 euros
  • Joint limit: 12,000 euros (considering in the first place the business contributions and later the personal contributions).

Contributions that are not eligible for reductions because they exceed the previous limits may be reduced in the five following fiscal years, provided that the individual is not retired. 

Reductions are not permitted in contributions made to pension plans after the period following that in which the member is in a situation of retirement.

With regard to the contributions and contributions that carry out in the same exercise in which copper a benefit in the shape of capital for the contingency of retirement or for voluntary redundancy, the reduction see limited to the amount of the contributions carried out in the exercise that corresponds with the perceptions that make up indeed in the basis of assessment of the same one (except for the contributions carried out to plans of employment, in favor of the spouse and in favor of handicapped people).

Moreover, be able to be object of reduction the contributions yearly carried out for the disabled people (person with physical disability or sensory higher than 65% or psychic higher than 33% or legally declared disability regardless of the degree), with the limit of 24,250 euros. As well as the contributions yearly carried out for every person in favor of the disabled person with which there is kinship or tutorship, with the limit of 8,000 euros, without prejudice to the contributions that can carry out to your own social security systems. The set of reductions in favor of the disabled person not be able to exceed the 24,250 euros a year, having this last preference for reduce.

And the contributors whose spouse or unmarried partner not obtains payable incomes in the General Basis Of assessment, or the obtains in amount lower than 8,000 euros a year, be able to reduce the contributions carried out to your favor with the maximum limit of 2,400 euros a year.

The EPSV (equivalent to the pension plans but just available for the living in Basque Country), unlike the rest of systems of social security, not have financial limit of contribution.

Fiscal residence in Navarre

The  overall maximum limit  for reducing the total contributions is the lower of the following amounts:

  • 3,500 euros a year. In the case of participants or mutualist people over 50 years old, the amount previous be of 6,000 euros a year.
  • 30% of the sum of the net yield of the work and of business and professional activities perceived individually during the financial year. Nevertheless, in the case of participants or mutualist people over 50 years old, the percentage be of 50%.

Additionally, an internal and independent limit of 3,500 euros a year will be applied for corporate contributions to social security systems that have been attributed to the participants, insured persons or mutual society members. Attributed contributions over this amount will be considered for the purposes of applying the overall maximum limit set forth in the preceding paragraph.

Regardless of the reductions made in accordance with the above limits, contributions may be made on behalf of a spouse provided he/she does not receive income from work or economic activities, or said income is less than 8,500 euros a year. In this case, the limit of contribution and desgravación be of 2,000 euros a year.

In the case of contributions to pension plans made on behalf of participants with a disability (physical or sensory disability of at least 65%, mental disability of at least 33%, or those legally declared as such), the limit is extended to 24,250 euros. Persons who are related (spouse, family member or guardian) to the disabled participant may extend their contribution limit by 10,000 euros. This extension is intended for contributions to the plan for the disabled participant. However, the total of the deductions applied by all the individuals who make contributions on behalf of the same disabled person, including said disabled person's own contributions, cannot exceed 24,250 euros a year.