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.