News published in INFORMA 2018

News published in INFORMA in June

Indemnity interest payable on account of late payment of exempt indemnity is also exempt in accordance with article 7 of the Personal Income Tax Act. Interest set, regarding accessory obligation, must be treated the same as the principal amount they derive from and be classified in these cases as exempt capital gains.

For the purposes of the twelfth temporary provision of the Personal Income Tax Act, to apply the 40 percent reduction for social welfare systems, it should be understood that the contingency of retirement shall generally occur when full retirement is taken. However, if prior to full retirement, all or part of the retirement benefit is collected, it will be considered that the contingency of retirement occurs when partial retirement is taken.

For tax purposes, joint ownership of farming operations shall be treated in the same manner as entities as per article 35.4 of General Tax Act 58/2003 of 17 December. Therefore, these entities shall be taxed for Personal Income Tax purposes under the income allocation system. Income from these entities will be attributed to each of the spouses or members of the civil union on a fifty-fifty basis.

Income of jointly-owned farming operations shall be subject to withholdings and or payment on account. These operations will also be obliged to withhold or make payments on account regarding paid income subject to this obligation.