Provision of economic rights and taxation of the insured annuity

Provision of economic rights

In the event of total or partial disposition by the taxpayer before the establishment of the life annuity of the accumulated economic rights, tax will be paid in accordance with the provisions of the Tax Law in proportion to the disposition made. For these purposes, the amount recovered shall be deemed to correspond to the premiums paid in the first place, including their corresponding profitability.

The policyholders of individual systematic savings plans may, by unilateral decision, transfer their mathematical provision to another individual systematic savings plan of which they are policyholders. The total or partial transfer of a systematic savings plan to another will follow, as far as applicable, the procedure relating to insured pension plans (Additional Provision Five of the Personal Income Tax Regulations).

In the event of advance payment, in whole or in part, of the economic rights derived from the established life annuity, the taxpayer must integrate into the tax period in which the advance payment occurs, the income that was exempt by application of the provisions of letter v) of article 7 of the Personal Income Tax Law.

Taxation of insured life annuities

1. The profitability that is demonstrated in the constitution of the insured life annuity (difference between the actuarial current value of the annuity and the sum of the premiums paid) is exempt from personal income tax , in accordance with the provisions of article 7.v) of the Personal Income Tax Law.

2. The life annuity received will be taxed in accordance with the percentages established for immediate life annuities.

   For these purposes, it should be noted that, in the case of immediate life annuities that have not been acquired by inheritance, legacy or any other succession title, the result of applying the following percentages to each annuity is considered to be income from movable capital:

   Age of the recipient	Applicable percentage
   Under 40 years old	40 percent
   Between 40 and 49 years old	35 percent
   Between 50 and 59 years old	28 per 100
   Between 60 and 65 years old	24 per 100
   Between 66 and 69 years old	20 per 100
   70 years or older	8 per 100

   These percentages will correspond to the age of the annuitant at the time of establishing the annuity and will remain constant throughout its validity.