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Practical Income Manual 2019.

Transitional regime applicable to life and temporary annuities received as of January 1, 2007

Regulations: Transitional provision fifth Law Personal Income Tax

In accordance with the provisions of the fifth transitional provision of the Personal Income Tax Law, the transitional regime applicable to life and temporary annuities, immediate or deferred, that are received as of January 1, 2007 distinguishes between:

  1. Income established prior to January 1, 1999.

    The determination of the part of the income that is considered a return on movable capital will be carried out by applying exclusively to the corresponding annuity the percentages provided for in the "Income insurance" section, depending on whether it is a life or temporary annuity, respectively.

    These percentages will be applicable depending on the age of the recipient at the time of creation of the annuities in the case of life annuities or depending on the total duration of the annuity if it is a temporary annuity.

    In the rescue of life or temporary annuities, to calculate the return on the movable capital produced as a result of the rescue, the profitability obtained up to the date of constitution of the annuity will be subtracted. The determination of this last amount will be carried out in accordance with what was mentioned in number 4 above of the "Income insurance" section.

  2. Income constituted between January 1, 1999 and December 31, 2006.

    The determination of the part of the income that is considered a return on movable capital will be carried out by applying the indicated percentages to the annuity, depending on whether it is a life or temporary annuity, respectively.

    These percentages will be applicable depending on the age of the recipient at the time of creation of the annuities in the case of life annuities or depending on the total duration of the annuity if it is a temporary annuity.

    Additionally, if applicable, the profitability obtained up to the date of constitution of the income will be added. The determination of this last amount will be carried out in accordance with what was mentioned for deferred, life or temporary annuity insurance, in the "Income insurance" section.