There are dates marked in red on your calendar. Your birthday (and that of your family members), Christmas or summer holidays are some of them, in addition to the annual presentation of the income statement. It is the moment in which the Tax Agency (@Haciendagob) calculate your returns and possessions to determine if you have the obligation to pay the money that corresponds to you for that adjustment or if, on the contrary, the tax entity owes you that amount.
In this sense, among economic assets you may have a Pension plan. A provisional savings product whose objective is to have an additional amount of money to have available on your retirement day, in the form of capital or income. You may not know, but this financial modality has a tax relief in relation to the contributions that you make periodically and on time during the useful life.
Therefore, today we are going to discover the best method to calculate relief that corresponds to your pension plan and how to do it correctly for your appointment each year with the Treasury.
How to pay and deduct for this financial product
An economic benefit that will depend not only on the amount that you add to the plan, but on the value of it and the salary you have at that time. In this case, remember that there is no such advantage if the income comes mostly from income from real estate or financial type.
So, when it comes to reducing money from the annual tax bill, you can do it according to the Personal income tax base that corresponds to you to pay to the state coffers. Of course, to do it well, you must first know that the deduction that you can make is done by income brackets.
For example, if a year you receive between 12,000 and 20,000 euros for your work, you are entitled to 24% of personal income tax and you have made a contribution of 3,000 euros to that pension plan. Therefore, you would receive approximately 1,200 euros with this calculation. In short, the value of said tax reduction will depend on your income, your annual contribution to the pension plan and your withholding, so the percentage that is exempted may be between 19% and 45%, in the latter case if your earnings are large.
Of course, you should know that the Treasury stipulates a limit money to deduct each year and that is about 8,000 euros, or 30% of the net income that you have obtained with your work or your economic activities. Between both figures, you will deduct the lesser amount of said economic values.
This at the state level, since there are communities like Basque Country and Navarra that have exceptions for having own taxation. Thus, if you reside in Vitoria, for example, the maximum money you can receive for a pension plan is about 5,000 euros each year for individual contributions. If these are from the promoter, up to 8,000 euros. Altogether, the deduction can be 12,000 euros in the income statement.
But if you live in Pamplona and you are less than 50 years old, the maximum that this organization will give you in Navarra will be the smallest figure: 3,500 euros or 30% of the total working income you have. If you have already reached that age, the maximum is extended to 6,000 euros and 50%.
Applicable to the entire national territory there are a couple of exceptions to the maximum amount that you could deduct, if you have one disability or if you put money in another person with whom you are related, who is the owner of a savings plan and has this recognized condition.
Some recommendations to take into account in this regard
As explained from Self Bank (@selfbank), pension plans are “illiquid”, that is, they can only be redeemed before retirement (recover all the savings that have been invested in said fund) in certain casesTherefore, in his opinion, if “there is no tax appeal, we could opt for other options to invest our money.”
An opinion shared by other experts when stating that this type of financial products are not very profitable, in relation to the income statement, if you are a person no income. You wouldn’t have a tax benefit, but you would be obliged to pay at the moment in which you want to recover the money from your pension plan. In line with the latter, state regulations allow you to rescue the contributions you have made to this savings product, but in some special circumstances:
- If that pension plan has 10 years old counting from 2015. For example, if you hired him at two years, until 2027 you could not do it.
- If certain assumptions are met before retirement: due to unemployment, disability, recognized dependency or a very serious illness among other cases.