On Thursday 27 November 2014, Law 26/2014 was published in the Official State Gazette (BOE), which amended the Personal Income Tax (IRPF), a tax that affects the participants and beneficiaries of Pension Plans, with effect from 1 January 2015.
In 2006, Law 35/2006 of 28 November 2006 eliminated the possibility of applying the 40% reduction to Pension Plan benefits in the form of capital, although it established a transitional regime that allowed the reduction to be maintained for the amounts contributed (plus their yields) and/or contingencies occurring before 1 January 2007 (the date of its entry into force).
The new 2014 Law maintains this transitional regime, but only allows for its application in the following terms:
a. New contingencies (occurring on or after 1 January 2015), the 40% reduction may be applied when claiming the benefit in the same year in which the contingency occurs or in the following two years.
b. Old contingencies (occurring before 1 January 2015), two cases are distinguished:
- Contingencies occurring in the financial years 2011 to 2014, the transitional scheme may only apply, where applicable, to benefits received up to the end of the eighth financial year following that in which the relevant contingency occurred.
- In the case of contingencies occurring in 2010 or earlier, the transitional scheme may only apply, where appropriate, to benefits received up to 31 December 2018.
The application of the 40% reduction is thus subject to a timetable summarized in the table below:
Year of occurrence Contingency | Maximum time limit for collection with 40% reduction |
---|---|
2010 or earlier | 31-Dec-2018 |
2011 | 31-Dec-2019 |
2012 | 31-Dec-2020 |
2013 | 31-Dec-2021 |
2014 | 31-Dec-2022 |
2015 or later | 31-Dec + 2 years |
EPP Control Committee of CaixaBank, S.A.
Barcelona, January 2015.