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Practical manual for Income Tax 2022.

Taxation and mobilization of economic rights

Taxation

a. Positive capital gains: exemption

  • Rating of the capital gains from long-term savings plans:

    • Individual Long-Term Savings Insurance (SIALP): Income from capitalization operations and life or disability insurance contracts (Art. 25.3 Law IRPF ).

    • Individual Long-Term Savings Account and its acronym (CIALP): Income from the transfer of own capital to third parties (Art. 25.2 Law Personal Income Tax ).

  • Positive returns on personal capital from life insurance, deposits and financial contracts through which Long-Term Savings Plans are implemented will be exempt provided that the taxpayer does not make any withdrawal of the capital resulting from the Plan before the end of the 5-year period from its opening.

  • If before the end of the 5-year period any disposition of the resulting capital occurs or the limit on annual contributions is breached, the taxpayer will be obliged to integrate the income generated during the validity of the Plan into the tax period in which such breach occurs.

    In these cases, the credit institution or insurer with which the taxpayer had contracted the long-term savings plan will be obliged to make a withholding or payment on account, which in 2022 was 19% on the positive capital gains obtained since the opening of the Plan, including those that could be obtained due to its termination (Art.75.4 Regulation IRPF ).

b. Negative capital gains

Any negative capital gains that may be obtained during the term of the Long-Term Savings Plan, including any that may be obtained upon termination of the Plan, will be imputed to the tax period in which termination and only to the extent of the total amount of such negative gains that the sum of the gains from the same to which the exemption would have been applied.

Mobilization of economic rights

The holder of a Long-Term Savings Plan may transfer all of the economic rights of the individual long-term savings insurance and the funds established in the individual long-term savings account to another Long-Term Savings Plan of which he or she will be the holder without this implying the disposal of the resources and, consequently, without loss of the tax benefit of the exemption from positive capital gains, provided that the transfer meets certain requirements established in the Eighth Additional Provision of the Personal Income Tax Regulations .

Mobilization will not be possible in cases where the economic rights or funds are subject to any embargo, charge, pledge or limitation of legal or contractual provision.