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Practical Income Manual 2019.

Special assumptions

  • Deferred capital insurance intended for the creation of income

    Regulations: Art. 25.3 a) 6 Law Personal Income Tax

    Life or disability insurance that provides benefits in the form of capital and said capital is used to create life or temporary annuities will not be taxed at the time the contingency covered by the insurance occurs, but will do so at the time of constitution. of life or temporary annuities in accordance with their regime discussed below. To do this, it is necessary that the possibility of conversion be included in the insurance contract and that the capital not be made available to the taxpayer by any means.

  • Disability insurance whose beneficiary is the mortgagee

    Regulations: Fortieth Additional Provision Law Personal Income Tax

    The income derived from the benefit for the disability contingency covered by insurance will have the same tax treatment that would have corresponded if the beneficiary had been the taxpayer himself, that is, they will be considered income from movable capital, when the following requirements are met:

    • That it is received by the taxpayer's mortgage creditor as its beneficiary.
    • That the taxpayer's mortgage creditor has the obligation to fully or partially amortize the taxpayer's mortgage debt.
    • That the mortgage creditor is a credit institution, or another entity that professionally carries out the activity of granting loans or mortgage credits.

    However, these incomes will under no circumstances be subject to withholding.

    Important: The condition for the receipts derived from life or disability insurance to be taxed in personal income tax is that the policyholder who contracts and pays the insurance premium (or the insured if the insurance is collective), and the beneficiary of the benefit coincide, except the special case of insurance in which the beneficiary is the mortgagee; Otherwise, the collection will normally be taxed in the Inheritance and Donation Tax.