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Practical manual for Income Tax 2021.

Net tax base

Reductions in the general tax base

Reductions for contributions and contributions to social security systems

  • Maximum annual contributions (except for collective dependency insurance) and maximum joint reduction limit

    The general limit for the reduction applicable to the tax base for contributions to social security systems is reduced from 8,000 to 2,000 euros per year, although it is expected that the new limit may be increased by an additional 8,000 euros for employer contributions.

    The individual entrepreneur's own contributions to employment pension plans or to social welfare mutual funds, of which he is, in turn, a promoter and participant or mutual member, as well as those made to company social welfare plans or collective dependency insurance of which, in turn, he is the policyholder and insured, will be considered as company contributions, for the purposes of calculating this limit.

  • Transitional regime. Excess of contributions made and not reduced in the years 2016-2020

    A transitional regime is established which allows that, in the event that among the amounts pending reduction from the years 2016 to 2020 there are contributions made by the taxpayer and contributions imputed by the promoter, it is understood that the amounts pending reduction correspond to contributions imputed by the promoter, with the limit of the contributions imputed in said tax periods. Any excess over this limit will be deemed to correspond to contributions from the taxpayer.

  • Excess contributions and contributions corresponding to the fiscal year

    From the 2021 period, when the excess produced in the fiscal year includes contributions from the taxpayer and contributions imputed by the promoter, the determination of the part of the excess that corresponds to one and the other will be carried out in proportion to the amounts of the respective contributions and contributions.

  • Contributions to social security systems in which the taxpayer's spouse is a participant, mutual member or owner

    The maximum limit applicable to contributions to social security systems in which the taxpayer's spouse is a participant, member or holder is reduced from €2,500 to €1,000 per year.

  • Early availability of consolidated rights for taxpayers affected by the volcanic eruption on the island of La Palma

    In order to facilitate those affected by the volcanic eruption on the island of La Palma to meet unforeseen liquidity needs, article 11 of Royal Decree-Law 20/2021, of October 5, by which urgent support measures are adopted for the repair of the damage caused by volcanic eruptions and for the economic and social reconstruction of the island of La Palma ( BOE of 6), has established, on an exceptional basis and exclusively during the period between October 6, 2021 and July 5, 2022, the possibility for participants in pension plans, as well as insured persons in insured pension plans and company social security plans and mutual members of social security mutual funds to be able to dispose of their consolidated rights in advance in certain cases, establishing the conditions and a maximum amount of disposal.