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Taxation, legislation and links.
Due to their nature, Life and Savings insurance policies, Insured Pension Plans and Systematic Savings Plans have their own taxation scheme. Depending on where they are taken out, the advantages of these three types vary:
Tax regulations for Annual Renewable Multi-life, Permanent Multi-life, Life Express, periodic premium Active Savings, single premium Active Savings, Children's Savings and Superplan 5:
Spanish territory in general.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN SPAIN IN GENERAL.

In general, the benefits derived from individual life insurance policies, provided the beneficiary and the policyholder are the same person, are subject to PERSONAL INCOME TAX [IRPF] as income from capital.

Capital income is calculated as the difference between the capital received and the amount of the premiums paid, with tax applied to what is called the taxable amount of savings

Insurance companies are obliged to make withholdings on account of IRPF, at the rate of 20 percent in 2015 and 19 percent from 2016 on the net income derived from the benefit paid out. 

The benefits paid out for life and disability insurance policies, when the beneficiary is not the policyholder, are subject to INHERITANCE AND DONATIONS TAX [ISD].

THE TAX REGULATIONS APPLICABLE TO THE AFOREMENTIONED BENEFITS WILL BE THOSE PREVAILING AT THE TIME THEY ARE RECEIVED.

Region of Navarre.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN THE REGION OF NAVARRE

In general, the benefits derived from individual life insurance policies, provided the beneficiary and the policyholder are the same person, are subject to PERSONAL INCOME TAX [IRPF] as income from capital.

Capital income is calculated as the difference between the capital received and the amount of the premiums paid, with tax applied to what is called the taxable amount of savings

Insurance companies are obliged to make withholdings on account of IRPF, at the rate of 20 percent in 2015 and 19 percent from 2016 on the net income derived from the benefit paid out.

The benefits paid out for life and disability insurance policies, when the beneficiary is not the policyholder, are subject to INHERITANCE AND DONATIONS TAX.

THE TAX REGULATIONS APPLICABLE TO THE AFOREMENTIONED BENEFITS WILL BE THOSE PREVAILING AT THE TIME THEY ARE RECEIVED.

Regions of Alava, Guipuzcoa and Vizcaya.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN THE REGIONS OF ALAVA, GUIPUZCOA AND VIZCAYA.

In general, the benefits derived from individual life insurance policies, provided the beneficiary and the policyholder are the same person, are subject to PERSONAL INCOME TAX [IRPF] as income from capital.

Capital income is calculated as the difference between the capital received and the amount of the premiums paid, with tax applied to what is called the taxable amount of savings

Insurance companies are obliged to make withholdings on account of IRPF, at the rate of 21 percent on the net income derived from the benefit paid out.

The benefits paid out for life and disability insurance.

THE TAX REGULATIONS APPLICABLE TO THE AFOREMENTIONED BENEFITS WILL BE THOSE PREVAILING AT THE TIME THEY ARE RECEIVED.

Tax regulations for Insured Pension Plans:
Spanish territory in general.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN SPAIN IN GENERAL.

PREMIUM TAX SCHEME

It is possible to have early access to the benefits accrued provided that they are over ten years old.

The amounts received will be subject to the legal applicable tax rules for pension plans.

The reduction in the contributions made to (sistemas de prevision de empleo e individuales) can be applied even when you have had early access to the benefits accrued always provided you have at least ten years worth of contributions.

The premiums paid by insured parties for insured pension plans that fulfil the regulatory requirements may be deducted from the IRPF taxable amount, the maximum limit being the lesser of the following two amounts:

  • 30 percent of the sum of the net income from earnings and financial activities received individually during the financial year.
  • 8,000 euro per annum.

This maximum limit is a combined amount for all payments and contributions to pension plan systems.

Regardless of the deduction applied based on the aforementioned limits, taxpayers whose spouse does not obtain any net income from earnings and financial activities, or who obtains less than 8,000 per annum for such income, may deduct from the taxable amount the contributions made to pension plan systems held by said spouse, with a maximum limit of 2,500 euro per annum (these contributions are not subject to ISD).

When it was not possible to deduct the aforementioned contributions from the taxable amount due to insufficiency thereof or application of the percentage limits, they may be deducted in the following five tax years, always respecting the aforementioned limits.

Contributions made to insured pension plans in favour of people with a certain level of disability and kinship may also be deducted from the taxable amount, pursuant to the regulatory limits prevailing at any time (these contributions are not subject to ISD):

All the aforementioned deduction limits are combined for the sum of the contributions made by the taxpayer to pension plans, mutual insurance pension plans, insured pension plans, company pension plans and dependency insurance policies.

TAX SCHEME FOR BENEFITS

The benefits received by the beneficiaries of insured pension plans are subject to IRPF as personal earned income, regardless of whether or not they are survivor or death benefits.

Benefits are taxed in their entirety and under no circumstances may the amount corresponding to surplus contributions be deducted.

WITHHOLDINGS ON ACCOUNT OF TAXES AND REGULATED OBLIGATIONS

Net earned income derived from insured pension plan benefits are subject to withholding on account of IRPF, pursuant to the system for calculating withholdings applicable to earned income.

In this respect, the paying entities must apply the referred percentage to the part of the benefit subject to taxation, calculated in accordance with the aforementioned criteria, and pay in the resulting amount to the Public Treasury.

Additionally, they are obliged to supply annual information to the policyholders of insured pension plans, as well as to the Tax Authorities [AEAT], regarding all the contributions made during each tax period, whether in favour of the policyholder's insured pension plans or in favour of the spouse or a disabled person.

THE TAX SCHEME APPLICABLE BOTH TO THE CONTRIBUTIONS AND THE BENEFITS WILL BE THAT PREVAILING AT THE TIME OF THEIR PAYMENT OR RECEIPT.

Region of Navarre.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN THE REGION OF NAVARRE.

PREMIUM TAX SCHEME

The premiums paid by insured parties for insured pension plans that fulfil the regulatory requirements may be deducted from the IRPF taxable amount, the maximum limit being the lesser of the following two amounts:

  • 30 percent of the sum of the net income from earnings and financial activities received individually during the financial year. This percentage will be 50 percent for taxpayers over the age of 50.
  • 8,000 euro per annum. Nevertheless, for taxpayers over the age of 50, this amount will be 12,500 euro.

This maximum limit is a combined amount for all payments and contributions to pension plan systems.

Regardless of the deduction applied based on the aforementioned limits, taxpayers whose spouse does not obtain any net income from earnings and financial activities, or who obtains less than 8,500 per annum for such income, may deduct from the taxable amount the contributions made to pension plan systems held by said spouse, with a maximum limit of 2,000 euro per annum (these contributions are not subject to ISD).

When the contributions that are deductible from the taxable amount exceed the established maximum limit, the amounts corresponding to said surplus may be deducted in the following five tax years.

Contributions made to insured pension plans in favour of people with a certain level of disability and kinship may also be deducted from the taxable amount, pursuant to the regulatory limits prevailing at any time (these contributions are not subject to ISD):

All the aforementioned deduction limits are combined for the sum of the contributions made by the taxpayer to pension plans, mutual insurance pension plans, insured pension plans, company pension plans and dependency insurance policies.

TAX SCHEME FOR BENEFITS

The benefits received by the beneficiaries of insured pension plans are subject to IRPF, as personal earned income, regardless of whether or not they are survivor or death benefits.

In general, all benefits received are taxed in their entirety, unless any of the following deductions are applicable:

Capital payments

40 percent deduction, provided two years have elapsed since the first contribution.

Capital payments for disability

50 percent, in the case of benefits for partial, total or absolute permanent disability, as well as serious disability.

Benefits for retirement or disability in the form of income:

These deductions will not be applicable to the retirement or disability benefits received in the form of income.

WITHHOLDINGS ON ACCOUNT OF THE TAX

Net earned income derived from insured pension plan benefits are subject to withholding on account of IRPF at the percentage established in each case, based on the personal circumstances of the beneficiary.

THE TAX SCHEME APPLICABLE BOTH TO THE CONTRIBUTIONS AND THE BENEFITS WILL BE THAT PREVAILING AT THE TIME OF THEIR PAYMENT OR RECEIPT.

Region of Alava.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN THE REGION OF ALAVA:
PREMIUM TAX SCHEME

The premiums paid for insured pension plans that fulfil the regulatory requirements may be deducted from the IRPF taxable amount with a limit of 5,000 per annum.

For these purposes employer contributions are not taken into account. Nevertheless, respecting the established limits for each one (individual contributions and employer contributions), the overall limit for deductions for contributions and payments to pension plan systems is 12,000 euro per annum.

Regardless of the aforementioned deduction, taxpayers whose spouse or de facto partner does not obtain any net earned income to be incorporated in the general taxable amount or who obtains less than 8,000 per annum, may deduct from the general taxable amount the contributions made to insured pension plan systems held by said spouse or de facto partner, with a maximum limit of 2,400 euro per annum (these contributions are not subject to ISD).

The aforementioned contributions that could not be deducted from the taxable amount due to insufficiency thereof may be applied in the following five years.

Contributions made to insured pension plans in favour of people with a certain level of disability and kinship may also be deducted from the taxable amount, pursuant to the regulatory limits prevailing at any time (these contributions are not subject to ISD):

All the aforementioned deduction limits are combined for the sum of the contributions made by the taxpayer to pension plans, mutual insurance pension plans, insured pension plans, company pension plans and dependency insurance policies.

TAX SCHEME FOR BENEFITS

The benefits received by the beneficiaries of insured pension plans are subject to IRPF, as personal earned income, regardless of whether or not they are survivor or death benefits.

In general, all benefits received in the form of capital are incorporated in their entirety. Notwithstanding the aforementioned, this incorporation will be 60 percent in the following cases:

  • In the case of the first benefit received for each of the different contingencies, provided more than two years has elapsed since the first contribution payment. The two years deadline is not applicable in the case of benefits for disability or dependency.
  • In the case of successive benefits for the same contingency, received once five years have elapsed from the previous benefit, when the contributions are made with sufficient periodicity and regularity.

First benefit is deemed as the amounts as a whole received in the form of capital during a single tax period due to the occurrence of each contingency. The same rule will be applied to the successive benefits.

The same rule will also be applicable to amounts received in the case of serious illness or long-term unemployment.

WITHHOLDINGS ON ACCOUNT OF THE TAX

Net earned income derived from insured pension plan benefits are subject to withholding on account of IRPF at the percentage established in each case, based on the personal circumstances of the beneficiary.

THE TAX SCHEME APPLICABLE BOTH TO THE CONTRIBUTIONS AND THE BENEFITS WILL BE THAT PREVAILING AT THE TIME OF THEIR PAYMENT OR RECEIPT.

Region of Guipuzcoa.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN THE REGION OF GUIPUZCOA

PREMIUM TAX SCHEME

The premiums paid for insured pension plans that fulfil the regulatory requirements may be deducted from the IRPF taxable amount with a limit of 5,000 per annum.

For these purposes employer contributions are not taken into account. Nevertheless, respecting the established limits for each one (individual contributions and employer contributions), the overall limit for deductions for contributions and payments to pension plan systems is 12,000 euro per annum.

Regardless of the aforementioned deduction, taxpayers whose spouse or de facto partner does not obtain any net earned income to be incorporated in the general taxable amount or who obtains less than 8,000 per annum, may deduct from the general taxable amount the contributions made to insured pension plan systems held by said spouse or de facto partner, with a maximum limit of 2,400 euro per annum (these contributions are not subject to ISD).

The aforementioned contributions that could not be deducted from the taxable amount due to insufficiency thereof may be applied in the following five years.

Contributions made to insured pension plans in favour of people with a certain level of disability and kinship may also be deducted from the taxable amount, pursuant to the regulatory limits prevailing at any time (these contributions are not subject to ISD):

All the aforementioned deduction limits are combined for the sum of the contributions made by the taxpayer to pension plans, mutual insurance pension plans, insured pension plans, company pension plans and dependency insurance policies.

TAX SCHEME FOR BENEFITS

The benefits received by the beneficiaries of insured pension plans are subject to IRPF, as personal earned income, regardless of whether or not they are survivor or death benefits.

In general, all benefits received in the form of capital are incorporated in their entirety.

Notwithstanding the aforementioned, this incorporation will be 60 percent in the case of the first benefit received for each of the different contingencies, provided more than two years has elapsed since the first contribution payment. The two years deadline is not applicable in the case of benefits for disability or dependency.

For these purposes, first benefit is deemed as the amounts as a whole received in the form of capital during a single tax period due to the occurrence of each contingency.

The same rule established in this section will also be applicable to the amounts received in the case of serious illness or long-term unemployment.

WITHHOLDINGS ON ACCOUNT OF THE TAX

Net earned income derived from insured pension plan benefits are subject to withholding on account of IRPF at the percentage established in each case, based on the personal circumstances of the beneficiary.

THE TAX SCHEME APPLICABLE BOTH TO THE CONTRIBUTIONS AND THE BENEFITS WILL BE THAT PREVAILING AT THE TIME OF THEIR PAYMENT OR RECEIPT.

Region of Vizcaya.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN THE REGION OF VIZCAYA.

PREMIUM TAX SCHEME

The premiums paid for insured pension plans that fulfil the regulatory requirements may be deducted from the IRPF taxable amount with a limit of 5,000 per annum.

For this purpose corporate contributions are not calculated. However, in terms of the limits set in each (individual contributions and corporate contributions), the entire reduction for contributions and contributions to social security systems is 12,000 Euros per year.

Regardless of the aforementioned deduction, taxpayers whose spouse or de facto partner does not obtain any net earned income to be incorporated in the general taxable amount or who obtains less than 8,000 per annum, may deduct from the general taxable amount the contributions made to insured pension plan systems held by said spouse or de facto partner, with a maximum limit of 2,400 euro per annum (these contributions are not subject to ISD).

The aforementioned contributions that could not be deducted from the taxable amount due to insufficiency thereof may be applied in the following five years.

Contributions made to insured pension plans in favour of people with a certain level of disability and kinship may also be deducted from the taxable amount, pursuant to the regulatory limits prevailing at any time (these contributions are not subject to ISD):

All the aforementioned deduction limits are combined for the sum of the contributions made by the taxpayer to pension plans, mutual insurance pension plans, insured pension plans, company pension plans and dependency insurance policies..

TAX SCHEME FOR BENEFITS

The benefits received by the beneficiaries of insured pension plans are subject to IRPF, as personal earned income, regardless of whether or not they are survivor or death benefits.

In general, all benefits received in the form of capital are incorporated in their entirety. Notwithstanding the aforementioned, this incorporation will be 60 percent in the following cases:

 

  • In the case of the first benefit received for each of the different contingencies, provided more than two years has elapsed since the first contribution payment. The two years deadline is not applicable in the case of benefits for disability or dependency.
  • In the case of successive benefits for the same contingency, received once five years have elapsed from the previous benefit, when the contributions are made with sufficient periodicity and regularity.

First benefit is deemed as the amounts as a whole received in the form of capital during a single tax period due to the occurrence of each contingency. The same rule will be applied to the successive benefits.

The same rule will also be applicable to amounts received in the case of serious illness or long-term unemployment.

WITHHOLDINGS ON ACCOUNT OF THE TAX

Net earned income derived from insured pension plan benefits are subject to withholding on account of IRPF at the percentage established in each case, based on the personal circumstances of the beneficiary.

THE TAX SCHEME APPLICABLE BOTH TO THE CONTRIBUTIONS AND THE BENEFITS WILL BE THAT PREVAILING AT THE TIME OF THEIR PAYMENT OR RECEIPT.

Tax regulations for Systematic Individual Savings Plans (Personal Savings):
Spanish territory in general.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN SPAIN IN GENERAL.

Systematic individual savings plans are contracts entered into with insurance companies to set up an insured annuity income with the funds paid in, provided the following requirements are complied with:

  • The funds paid in must be instrumented through individual life insurances in which the taxpayer is the subscriber, Insured Party and beneficiary.
  • The maximum annual limit paid in concept of premiums for this type of contract will be 8,000 euro and it will be independent from the limits for contributions to pension plan systems. The total amount of the accumulated premiums for these contracts may not exceed the combined total of 240,000 euro per taxpayer.
  • The first premium payment must have been made more than five years prior to the date of setting up the annuity income.

TAX SCHEME FOR BENEFITS

As an immediate lifetime income, the annuity income received will be subject to Personal Income Tax as income from capital, with taxation applied within the savings taxable amount.

The capital income is determined by applying the following percentages to each annual payment:

  • 40 percent, when the recipient is under 40 years old.
  • 35 percent, when the recipient is between 40 and 49.
  • 28 percent, when the recipient s between 50 and 59.
  • 24 percent, when the recipient is between 60 and 65.
  • 20 percent, when the recipient is between 66 and 69.
  • 8 percent, when the recipient is over 70.

These percentages will be applied based on the recipient's age at the time the annuity is set up and will remain constant throughout the entire term.

The aforementioned capital income will be subject to withholding for IRPF at the rate of 20 percent in 2015 and 19 percent from 2016 on the net income derived from the benefit paid out

The yield declared at the time of setting up the insured annuity income resulting from these systematic individual savings plans, will be exempt from tax.

Any full or partial drawdown of the accumulated financial entitlements by the taxpayer before the annuity income has been set up will be taxable pursuant to that established under IRPF regulations, in proportion to the amount drawn down. For these purposes, the amount recovered will be deemed to correspond to the first premiums paid, including the yields accrued thereon.

In the event of any full or partial prepayment of the financial entitlements derived from the annuity income set up, the taxpayer will be obliged to incorporate the income that was exempt in the tax period in which the prepayment is made.

THE TAX SCHEME APPLICABLE TO THE AFOREMENTIONED BENEFITS WILL BE THAT PREVAILING AT THE TIME OF THEIR RECEIPT.

Region of Navarre.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN THE REGION OF NAVARRE:

Systematic individual savings plans are contracts entered into with insurance companies to set up an insured annuity income with the funds paid in, provided the following requirements are complied with:

  • The funds paid in must be instrumented through individual life insurances in which the taxpayer is the subscriber, Insured Party and beneficiary.
  • The maximum annual limit paid in concept of premiums for this type of contract will be 8,000 euro and it will be independent from the limits for contributions to pension plan systems. The total amount of the accumulated premiums for these contracts may not exceed the combined total of 240,000 euro per taxpayer.
  • The first premium payment must have been made more than five years prior to the date of setting up the annuity income.

TAX SCHEME FOR BENEFITS

As an immediate lifetime income, the annuity income received will be subject to Personal Income Tax as income from capital, with taxation applied within the savings taxable amount.

The capital income is determined by applying the following percentages to each annual payment:

  • 40 percent, when the recipient is under 40 years old.
  • 35 percent, when the recipient is between 40 and 49.
  • 28 percent, when the recipient s between 50 and 59.
  • 24 percent, when the recipient is between 60 and 65.
  • 20 percent, when the recipient is between 66 and 69.
  •  8 percent, when the recipient is over 70.

These percentages will be applied based on the recipient's age at the time the annuity is set up and will remain constant throughout the entire term.

The aforementioned capital income will be subject to withholding for IRPF at a fixed rate of 20 percent.

The yield declared at the time of setting up the insured annuity income resulting from these systematic individual savings plans, will be exempt from tax.

Any full or partial drawdown of the accumulated financial entitlements by the taxpayer before the annuity income has been set up will be taxable pursuant to that established under IRPF regulations, in proportion to the amount drawn down. For these purposes, the amount recovered will be deemed to correspond to the first premiums paid, including the yields accrued thereon.

In the event of any full or partial prepayment of the financial entitlements derived from the annuity income set up, the taxpayer will be obliged to incorporate the income that was exempt in the tax period in which the prepayment is made.

THE TAX SCHEME APPLICABLE TO THE AFOREMENTIONED BENEFITS WILL BE THAT PREVAILING AT THE TIME OF THEIR RECEIPT.

Regions of Alava, Guipuzcoa and Vizcaya.
GENERAL INDICATIONS RELATING TO THE TAX SCHEME IN THE REGIONS OF ALAVA, GUIPUZCOA AND VIZCAYA.

Systematic individual savings plans are contracts entered into with insurance companies to set up an insured annuity income with the funds paid in, provided the following requirements are complied with:

  • The funds paid in must be instrumented through individual life insurances in which the taxpayer is the subscriber, Insured Party and beneficiary.
  • The maximum annual limit paid in concept of premiums for this type of contract will be 8,000 euro and it will be independent from the limits for contributions to pension plan systems. The total amount of the accumulated premiums for these contracts may not exceed the combined total of 240,000 euro per taxpayer.
  • The first premium payment must have been made more than five years prior to the date of setting up the annuity income.

TAX SCHEME FOR BENEFITS

As an immediate lifetime income, the annuity income received will be subject to Personal Income Tax as income from capital, with taxation applied within the savings taxable amount.

The capital income is determined by applying the following percentages to each annual payment:

  • 40 percent, when the recipient is under 40 years old.
  • 35 percent, when the recipient is between 40 and 49.
  • 28 percent, when the recipient s between 50 and 59.
  • 24 percent, when the recipient is between 60 and 65.
  • 20 percent, when the recipient is between 66 and 69.
  • 8 percent, when the recipient is over 70.

These percentages will be applied based on the recipient's age at the time the annuity is set up and will remain constant throughout the entire term.

The aforementioned capital income will be subject to withholding for IRPF at the rate of 20 percent in 2015 and 19 percent from 2016 on the net income derived from the benefit paid out.

The yield declared at the time of setting up the insured annuity income resulting from these systematic individual savings plans, will be exempt from tax.

Any full or partial drawdown of the accumulated financial entitlements by the taxpayer before the annuity income has been set up will be taxable pursuant to that established under IRPF regulations, in proportion to the amount drawn down. For these purposes, the amount recovered will be deemed to correspond to the first premiums paid, including the yields accrued thereon.

In the event of any full or partial prepayment of the financial entitlements derived from the annuity income set up, the taxpayer will be obliged to incorporate the income that was exempt in the tax period in which the prepayment is made.

THE TAX SCHEME APPLICABLE TO THE AFOREMENTIONED BENEFITS WILL BE THAT PREVAILING AT THE TIME OF THEIR RECEIPT.

Legislation applicable to the Insurer
Links

STATE INSTITUTIONS

Ministry of Economy
www.minhac.es
General Directorate of Insurance and Pension Funds (Ministry of Economy)
www.dgsfp.mineco.es
Insurance Compensation Consortium
www.consorseguros.es
Bank of Spain
www.bde.es
Spanish Tax Administration
www.agenciatributaria.es

INTERNATIONAL INSTITUTIONS

European Union
www.europa.eu
European Central Bank
www.ecb.int
European Investment Fund
www.europa.eu/institutions/financial/eif/index_es.htm

OTHER INSTITUTIONS

Cooperative Research between Insurance
www.icea.es
Bodies and Pension Funds Spanish Association of Insurers and Reinsurers
www.unespa.es

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www.exchange.de
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