TAX REGULATION OF ASSURED SAVINGS PLANS

General provisions of the Tax environment in common territory.

Taxation of premiums

Premiums paid by the Insured towards qualifying assured savings plan may be offset against basic IRPF, applying the lesser of the following amounts:

• 30% of the sum of net income during the year from work and receipts from personal economic .activity. This percentage shall be 50% for contributors more than 50 years of age.
• 10.000 euros per annun. Nevertheless in the case of contributors more than 50 of age, this figure will be 12.500 euros.

This is the maximum combined limit for all payments and contributions towards social security system benefits and contributions.

Independently of the reduction made in accordance with the above limits, contributors whose partner does not receive net working or investment income or does so in an amount of less than 8.000 euros per annum, the taxable income may be reduced by the amount produced by the Assured Savings Plans taken in the partner’s name up to a limit of 2.000 euros per annum (these contributions will not be subject to ISD).

Where these previously mentioned provisions do not produce a reduction in the taxable base, due to the insuffiency thereof or due to the application of the percentage limit, reductions may be made in the five following tax years (always within these limits).

Payments made towards assured savings plans for the benefit of persons with 65% or more physical or sensorial disability, psychiatric deficiency of more than 33%, as well as for any person with a judicially declared incapacity regardless of the degree thereof, with whom there exists a family relationship up to the third degree of consanguinity or one of spouse, guardian or trustee, may qualify for reduction in the taxable base, with the following limits (these payments shall not be subject to ISD):

• 10.000 euros per annun, without affecting payments which may be made to their own assured savings plans.
• Payments made by the persons suffering the incapacity, subject to a limit of 24.250 euros per annum.
• The total of the reductions made for all persons who make payments in favour of the same person with incapacity, may not exceed 24,250 euros per annum, including those of the person with incapacity himself. For these purposes, when there are several payments in favour of a person with incapacity, the reduction will be applied, in the first place, to the payments made by the person with incapacity himself and only if these do not exceed the limit of 24,250 euros per annum, the paymenst made by other persons in his favour may be the subject of reductions in their own taxable bases, on a proportional basis.

All the deduction limits previously mentioned shall be added together for the total of payments made by the contributors to pension plans, social security mutual benefits, assured savings plans, company savings plans and dependency insurance.

Taxation of benefits

All benefits received by the beneficiaries of assured savings plans shall be considered personal income from work, regardless of whether the benefits arise from cases of survival or death.

The benefits will be taxable in their totality, and may not, in any case, be reduced by the amounts representing the excess payments.

Formal obligations:

The net working yields of assured savings plan benefits, are subject to retention on account of IRPF, in accordance with the methods for the calculation of retentions applicable to income from work.

In this respect, the entities making the payments are obliged to retain the relevant percentage of that part of the benefits subject to tax, calculated in accordance with the previous criteria, and pay such amount to the public treasury.

Additionally, the Companies are obliged to submit information each year to the policyholders of PPA and to the AEAT, of all payments made during each tax year, both for their own PPA as well as payments made in favour of a spouse or person with incapacity. 

THIS TYPE OF INSURANCE SHALL BE SUBJECT TO THE TAX BENEFITS THAT THE LAW DETERMINES AT ALL TIMES.