The tax savings of the Pension Scheme
The Pension Plans, in conjunction with the Insured Pension Plans (PPA), deduct in the annual Income Declaration. The contributions generate tax base reductions in the personal income tax return, resulting in tax savings.
With regard to benefits for Pension Plans and PPP allowances, they are considered as work income. If the compensation is received in the form of income, they shall be taxed according to the general scale of taxation with the corresponding withholding tax. But if it is received in the form of capital, it will be reduced by 40% if the Plan is rescued in the first two years of hiring it.
Currently, the tax limits are 8,000 euros per year, regardless of the age of the holder. And that amount is the ceiling if you have multiple pension plans or PPPs. If this amount is exceeded, the entity is obliged to refund the amount it exceeds.
A taxpayer whose spouse does not earn income from work or economic activities or whose income is less than EUR 8000 per year, may reduce in the Tax Base the contributions made to pension plans of which the spouse is a member up to a maximum limit of 2,500 euros.
Persons with a physical or sensory disability equal to or greater than 65%, psychic equal to or greater than 33%, may make contributions and benefit from reductions in the personal income tax base, with the following maximum amounts:
- Those made by the participants with disabilities themselves: 24,250 euros
- Third party support for the disabled: EUR 10000
* The limit for annual contributions, including those of the disabled person and third parties, shall be EUR 24,250.