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Form 100. Personal Income Tax Return 2021

8.4.2.6. Maximum annual contributions and reduction limit

Maximum annual contributions with right to reduction

  • In general .

    The set of maximum annual contributions that may give the right to reduce the tax base, including, where applicable, those that have been imputed by the promoters, may not exceed 2,000 euros.

    This limit will be increased by 8,000 euros, provided that such increase comes from employer contributions.

    The individual entrepreneur's own contributions to employment pension plans of which he is, in turn, a promoter and participant, will be considered as business contributions, for the purposes of calculating this limit .

  • In the case of collective dependency insurance, the premiums paid by the company under these insurance contracts and charged to the worker will have an independent reduction limit of 5,000 euros per year.

Reduction limit 

As a joint maximum limit for the above reductions, the lowest of the following amounts shall apply:

  • 30% of the sum of the net income from work and economic activities received individually during the year.

  • 2,000 euros per year.

    This limit will be increased by 8,000 euros, provided that such increase comes from employer contributions.

    The individual entrepreneur's own contributions to employment pension plans or to social welfare mutual funds, of which he is, in turn, a promoter and participant or mutual member, as well as those made to company social welfare plans or collective dependency insurance of which, in turn, he is the policyholder and insured, will be considered as company contributions, for the purposes of calculating this limit.

    And, additionally, 5,000 euros per year for the premiums for collective dependency insurance paid by the company.

The imputation of the excess will be carried out respecting the limits established in the Tax Law.

For these purposes, when in the tax period in which said excess occurs there are contributions from the taxpayer and contributions imputed by the promoter, the determination of the part of the excess that corresponds to one and the other will be carried out in proportion to the amounts of the respective contributions and contributions.

When contributions made in the year are combined with contributions from previous years that could not be reduced due to insufficient tax base or exceeding the percentage limit, the contributions corresponding to previous years will be deemed to be reduced first.

Request for reduction 

Participants, mutual members or insured persons may request that the amounts contributed, including, where applicable, the promoter's contributions that have been imputed to them, which could not be subject to reduction in the tax base due to insufficiency of the same or due to application of the percentage limit, be reduced in the following five years.

This rule will not apply to contributions exceeding the limits established by law.

The application must be made in the Personal Income Tax return for the year in which the contributions made could not have been subject to reduction.