C 2. Benefits received in the form of capital derived from other private social security systems (pension plans, social security mutual societies and insured pension plans)

Regulations: twelfth transitional provision of the Personal Income Tax Law

Note: As of 1 January 2015, the application of the reductions under the transitional regime is limited to benefits in the form of capital received within the time periods indicated in section " Time limits for the application of the reductions under the transitional regime ".

Recipients of benefits arising from contingencies occurring after January 1, 2013, may apply the reduction regime in force on December 31, 2006, but only to the part of the benefit corresponding to contributions made up to that date (December 31, 2006).

This regime consists of the possibility of applying the following reductions:

a. 40% reduction in the following cases:

When more than two years have passed since the first contribution.
When they correspond to disability benefits, regardless of the period of time elapsed since the first contribution.

b. A 50% reduction for benefits received in the form of capital by persons with disabilities from social security systems established in their favour, provided that more than two years have passed since the first contribution.

Clarifications

The reduction applicable to benefits in the form of capital derived from pension plans or insured pension plans refers to all pension plans and insured pension plans subscribed to by the same person and in respect of the same contingency .

Thus, regardless of the number of pension plans held by a taxpayer, the possible application of the 40 or 50 percent reductions indicated above may only be granted to the amounts received in the form of capital in the same tax period and for the part corresponding to the contributions made up to December 31, 2006. The remaining amounts received in other years, even if received in the form of capital, will be taxed in full without applying the reduction.

However, in the event of receiving in the form of capital benefits derived from a pension plan and from a social security mutual fund for the same contingency, the application of the reduction will refer to the benefit from the pension plan and from the social security mutual fund independently.
In the case of retirement or disability benefits received from social security mutual funds , the reduction percentage is applied to the part of the total amount received corresponding to contributions made up to 31 December 2006 (for benefits arising from contingencies occurring after 1 January 2013), except in those cases where the total work income is determined by the difference between the amount received and the contributions that could not be subject to reduction or decrease in the taxable base of Income Tax .
If the benefits from pension plans are received in a mixed form (income and capital), the beneficiary may freely identify or decide which part of the benefit received in the form of capital corresponds to contributions made before December 31, 2006, including their profitability, and which corresponds to contributions made after this date.