Elements of Personal Income Tax

The concept of income includes :

Income from work and economic activities (salaries, wages, and other types of income, such as those of independent professionals), capital income (interest from bank accounts, stock dividends, etc.), and capital gains and losses (Article 6 of the Law). There are a number of incomes that are exempt from tax, such as Social Security pensions for permanent disability, certain literary prizes, scholarships for formal studies, or certain unemployment benefits, among others (Article 7 of the Law).

For the sole purpose of calculating the tax, the taxpayer's income will be classified based on its source as general income (salary, bonuses, etc.) or savings (interest from bank accounts, gains or losses from transfers of assets, etc.).

The income on which the tax is paid is net income , that is, after deducting the expenses necessary to obtain it, such as Social Security contributions and pension rights. Furthermore, if the person has incurred losses, they can, within certain limits, offset them with profits, even if the losses are from previous years.