 |
|
| Balearics Local Reference INFOrmation
An overview of the pensions and taxation in Spain, and the role of the supplementary pension for both retirees to Spain and those who have retired from 15 years or more employment in Spain or the Balearics.
It is important for anyone who doesn't qualify for a state pension or who will receive only the minimum state pension to contribute to a supplementary or private pension fund.
There are a wide range of private pension funds in Spain (many provided by the banks) and it's also possible to continue to contribute to a personal pension plan abroad or to an offshore fund. However, contributions to foreign pension schemes aren't tax deductible in Spain, although many major European private pension companies have offices or agents in Spain. Most experts advise that the best pension scheme for most people is one that doesn't require fixed monthly payments, but allows you to pay irregular lump sums. In Spain there is usually a minimum monthly payment, possibly as low as €50 a month and lump sum contributions are usually from €600. A pension should be index linked to insure that it keeps up pace with inflation. With an index linked policy, capital is tax free after contributions have been made for 15 years, with an increasing scale of tax penalties for early surrender. If you have an offshore pension, there's no tax relief but all the benefits paid are tax free. Where applicable, annual pension contributions to a company pension plan are tax deductible for Spanish tax payers with maximum amounts ranging from €8,000 to €24,250 depending on the age of the policy holder. Pensions paid to foreign residents in Spain are taxed as regular salary income and a one-time payment is taxed as regular income. The exceptions are civil service pensions, which are taxable in your home country and don't usually need to be declared to the Spanish authorities (this doesn't include United Nations pensions as the UN cannot tax its former employees). Note, however, that civil service pensions are usually taken into account when calculating your Spanish tax rate if you have another income which is taxable in Spain.
|
myAngloINFO Kip McGrath Education Centres Improve your child's English and Maths by working with experienced tutors, using PC, workbooks and drill sheets. Private tutoring centre creates individual programmes to help develop and maintain your child's skills. At Golf Son Quint, Palma, Mallorca Find out more... The Islander Free monthly newsletter for boating and living in The Balearics also available online.
Covers island news and light hearted observation on boating related matters. Available from over 90 outlets, wherever there are leisure yachting activities. Find out more... Planet Space Self Storage Self storage units from 1sqm - 50sqm. Totally flexible service, only pay for the space and time you need. Sophisticated 24hr CCTV security. Boxes and packing materials available, transport organised in-house. Two locations in Palma and Santa Ponsa. Find out more... Top Dental Paguera Dr J Schmittner provides high quality dental services including aesthetic dental treatment using the latest techniques and materials, ceramic crowns, veneers, ceramic bridges, bleaching and dental decoration. At Avenida Paguera 12, Paguera, Mallorca. Find out more... Today
|
Share
Print
+
Extract from Living and Working in Spain
2005 (5th Edition) 
Related reference INFOrmation on AngloINFO Balearics:
The Weather:
Relax for a few minutes in our online leisure zoneCopyright © 2000-2009 AngloINFO Limited. All rights reserved. Privacy Policy, Terms of Use, About, Advertising, Contact.
AngloINFO: Everyday life in Spain, in English
Find out more about AngloINFO in Spain...