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Practical manual for Income Tax 2020.

k) Contributions made to the protected assets of people with disabilities

By express legal provision, contributions made to the protected assets of people with disabilities regulated by Law 41/2003, of November 18, on the protection of the assets of people with disabilities and the amendment of the Civil Code, the Civil Procedure Law and the Tax Regulations for this purpose ( BOE of 19), in the terms indicated below, are in any case considered as work income.

Contributions to protected assets that constitute work income for the owner of said assets.

Regulations: Eighteenth Additional Provision of the Personal Income Tax Law .

Contributions made to protected assets are considered work income for the disabled person who owns said assets, with the following limits and conditions:

  1. When the contributors are taxpayers of IRPF , up to the amount of 10,000 euros per year for each contributor and 24,250 euros per year for all contributors.
  2. When the contributors are taxpayers of Corporate Tax, provided that the contributions have been deductible expenses in Corporate Tax, with a limit of 10,000 euros per year. This limit is independent of those indicated in number 1 above.

  3. In the case of non-monetary contributions, the amount of the contribution will be taken as that resulting from the provisions of article 18 of Law 49/2002, of December 23, on the tax regime of non-profit entities and tax incentives for patronage ( BOE of the 24th).

    In these cases, the disabled person who is the owner of the protected assets will be subrogated to the position of the contributor with respect to the date and value of acquisition of the assets and rights contributed, without, for the purposes of subsequent transfers, the reduction coefficients provided for in the ninth transitional provision of the Tax Law being applicable, where appropriate.

The amount of contributions that, due to exceeding the limits and conditions mentioned above, are not considered income from work will be subject to Inheritance and Gift Tax.

Finally, amounts that, in the terms discussed above, are considered work income are not subject to withholding or payment on account.

Integration of work income into the tax base of the disabled person

The integration of work income into the tax base of the IRPF of the disabled taxpayer, owner of the protected assets, will be carried out only for the amount by which these income exceeds three times the public indicator of multiple effects income ( IPREM ), this amount being 22,558.77 euros in the 2020 financial year (7,519.59 euros x 3).

See in this regard the exemption provided for in article 7.w the Personal Income Tax Law for work income derived from benefits obtained in the form of income by persons with disabilities corresponding to contributions to social security systems discussed in Chapter 2.

Disposition of contributions by the owner of the protected assets

Regulations: Art. 54.5 Law Income Tax

The disposition in the tax period in which the contribution is made or in the following four of any asset or right contributed to the protected assets of the disabled person will determine the following tax obligations for its owner:

  1. If the contributor was a taxpayer of IRPF , the owner of the protected assets who received the contribution must integrate into the tax base the part of the contribution received that he would have stopped integrating in the tax period in which he received the contribution as a consequence of the integration rule discussed in the previous point.

    To this end, the corresponding supplementary self-assessment must be submitted, including any applicable late payment interest, within the period between the date on which the provision is made and the end of the regulatory declaration period corresponding to the tax period in which said provision is made.

  2. If the contributor was a taxpayer of Corporate Tax , two cases must be distinguished:

    • In the event that the owner of the protected assets is the employee of the company that makes the contribution, it will be the latter (the employee) as owner of the protected assets who must include in his tax base the part of the contribution received that he would have failed to include in the tax period in which he received the contribution as a result of the application of the exemption provided for in article 7. w) of the Personal Income Tax Law and submit the corresponding supplementary self-assessment in the terms indicated above.

      For these purposes, the employee who is the owner of the protected assets must inform the employer who made the contributions of the provisions made during the tax period.

    • In the event that the contribution was made to the protected assets of relatives, spouses or dependents of workers under guardianship or foster care, the obligation described in the previous case must be fulfilled by the worker of the contributing company, who is responsible for communicating to his or her employer the provisions made in the tax period.

In the disposition of homogeneous assets or rights, it will be understood that those contributed first were disposed of. The aforementioned regularization will not occur in the event of the death of the owner of the protected assets, the contributor or the employees of the company.

Note: As regards the tax impact that the early disposition of the contributions made by the owner of the protected assets has for the contributors see Chapter 13.