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Practical Income Manual 2023.

Net tax base

Reductions in the general tax base

Reductions for contributions and contributions to social security systems

  • Maximum annual contributions (except for group dependency insurance) and the maximum joint reduction limit

    There are two new features that, in relation to the reduction limits for contributions and contributions to social security systems, have been introduced in Personal Income Tax by article 62 of Law 31/2022, of 23 December, of the General State Budgets for the year 2023:

    1. Regarding the increase in the additional limit of 8,500 euros (to the general limit of 1,500 euros), the maximum amount of contributions that an employed worker can make to the same social security instrument to which contributions have been made by the employer is linked both to the total full returns received by the worker from that employer (depending on whether they are less than or greater than 60,000 euros) and to the result of applying the corresponding multiplier to the respective business contribution in accordance with the provisions of article 52 of the Labor Law. IRPF .

    2. In addition, a new reduction limit of 4,250 euros is created, in addition to the general limit of 1,500 euros, applicable to:

      • Contributions to sectoral pension plans, made by self-employed workers or self-employed workers who join said plans due to their activity.

      • Contributions to simplified employment pension plans for self-employed workers or newly created self-employed workers. 

      • The contributions that the individual entrepreneur or professional makes to employment pension plans, of which he is a promoter and, in addition, a participant.

      • The contributions that the individual entrepreneur or professional makes to Social Security Mutual Funds of which he is a mutual member,

      • The contributions that the individual entrepreneur or professional makes to corporate social security plans or collective dependency insurance of which, in turn, he or she is the policyholder and insured.

  • Pan-European individual pension products

    Law 12/2022, of June 30, regulating the promotion of employment pension plans, which modifies the consolidated text of the Law on the Regulation of Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29, has added a fifty-second Additional Provision to the Income Tax Law in order to equate the tax treatment of pan-European individual pension products to that of plans of pensions. Thus:

    1. The saver's contributions to pan-European individual pension products may reduce the general tax base in the same terms as those made to pension plans and will be included in the joint maximum limit, provided for in article 52 of the Law of IRPF , for social security systems.

    2. The benefits received by its beneficiaries will in any case be considered income from work and will not be subject to ISD .

    3. The taxpayer must make up for the reductions in the tax base improperly made, through the appropriate complementary self-assessments, including late payment interest if he or she has the rights of economic content derived from contributions to pan-European individual pension products, in whole or in part, in assumptions other than those provided for in the regulations on pension plans and funds. The amounts received that exceed the amount of the regularized contributions will be taxed as income from work in the tax period in which they are received.

Reductions for contributions to protected assets of people with disabilities

As a consequence of the modification carried out by Law 13/2023, May 24 ( BOE of May 25) in Law 41/2003, of November 18, on patrimonial protection of people with disabilities, all tax benefits established in relation to protected assets of people with disabilities constituted in accordance with the aforementioned Law 41/2003, are applicable under the same terms and conditions as those formalized in accordance with the autonomous civil law. in those Autonomous Communities with constitutional powers to regulate their own civil, provincial or special law in this matter.

Likewise, and exclusively for the purposes of such tax benefits or for the tax purposes corresponding to any state tax regulation, the person with disabilities for whose benefit the protected assets are constituted will be considered to be the owner of the assets and rights that make up said assets and that Contributions made to it by persons other than said owner constitute transfers to it for profit.