Guide to the main allowances to be taken into account in the 2013 personal income tax return (II)
In order to complete our review of the main allowances in the personal income tax return of 2013 which we initiated last week, today we talk about other items that can help us reduce our tax bill.
Pension plans
The amounts contributed to pension plans, welfare mutual insurance societies, employee welfare plans and premiums paid to private insurance exclusively covering the risk of severe or comprehensive dependency can reduce taxable income, subject to certain limits:
- 30% of the sum of net salary income and economic activities income obtained individually in the fiscal year, increasing to 50% in the case of taxpayers over 50 years of age.
- €10,000 per year (or €12,500 in the case of taxpayers over 50 years of age). Moreover, €5,000 per year for premiums paid by the company for group care insurance.
- Additionally, €2,000 per year for contributions to employee welfare plans of which the taxpayer’s spouse is a participant, mutual society member or titleholder (provided that the spouse does not obtain salary or economic activities income or, if he or she does obtain such income, it is less than €8,000 per year).
Capital gains
Taxpayers can deduct their gaming losses up to the amount of winnings they have obtained in the same tax period, but they cannot compute the losses they have incurred in games in which the prizes are subject to the special tax rate of 20%.
Fees and contributions to political parties
The membership fees and contributions to political parties, federations, coalitions or voters’ groups can reduce the taxable income up to €600 per year.
Taxpayers can deduct 25% or 30% of the donations they have made to not-for-profit entities subject to Law 49/2002, of December 23, 2002, and 10% of the amounts they have donated to legally recognized foundations and to associations declared to be of public benefit.
Lease of the principal residence
Provided that the taxpayer’s taxable income is below €24,107.20 annually, he or she can deduct 10.05% of the amounts paid to lease the principal residence. For taxable income of €17,707.20 or less, the maximum base of the deduction will be €9,040 annually. If the taxable income is between €17,707.20 and €24,107.20, the deduction will be €9,040 minus the result of multiplying the difference between the taxable income and €17,702.20 annually by 1.4125.
Acquisition of the principal residence
In general, taxpayers can deduct 15% of the amounts paid to acquire or renovate their principal residence acquired before January 1, 2013, subject to a maximum base of €9,040.
Investment in new or recently formed companies
This is one of the new measures for this year, and consists of a deduction of 20% of the amounts paid (on a maximum base of €50,000) to subscribe shares or units in new companies that meet certain requirements, such as not having equity of more than €400,000 when the taxpayer acquires the shares or units.
Autonomous community deductions
It is also important to review these deductions because the autonomous communities have the authority to approve their own deductions in relation to the taxpayer’s personal and family circumstances, non-business investments, the application of income or non-exempt grants and government aid not affecting the pursuit of economic activities or the income included in the savings component of taxable income.
Garrigues Tax Department
