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Personal income tax deductions - Confiscations of the pension

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What income of the pensioner's is considered to determine the personal income tax rate in the initial recognition of the pension?

The amount of the benefit according to the number of corresponding payments, including extra payments, up until the end of the year, will be taken into account to calculate the pension's annual base, a determinant of the IRPF tax rate.

When the same individual receives benefits abroad and in Spain, both of these will be added together applying the tax regulation relating to the person's residence for tax purposes to the joint annual base.

Can the recipient of the pension request the application of a voluntary tax rate for income tax withholding?

Yes, so long as the voluntary rate requested is always greater than the one according to their economic, personal and family situation. You can apply for it through the Social Security e-Office or the Your Social Security Portal, in the "Manage your benefit" section. To do so, you must have a digital certificate, electronic ID or cl@ve.

If you do not have any of these means, there is a form called "Voluntary increase of personal income tax withholding". Once the form is completed and signed, it can be sent by ordinary mail or submitted to any of the Social Security Assistance and Information Centres(CAISS).

The voluntary rate requested will at least be applied until the end of the financial year and so long as the right to this percentage is not given up through communication in writing or a higher rate requested for subsequent years, unless there is a variation in the circumstances that determine a higher rate for the applicant voluntarily.

What personal income tax characteristics do benefit recipients residing abroad have?

Recipients of benefits living abroad must not indicate their personal and family circumstances, as these will not be taken into consideration for IRPF deduction purposes.

In addition, any bilateral agreement signed by Spain to avoid double taxation will be taken into account. If there is an agreement, no personal income tax deduction will be made and the regulations provided in each agreement will be in force.

Is it possible to confiscate Social Security system pensions and how much?

Social Security system pensions can be confiscated according to the scale set out in art. 607 of the Code of Civil Procedure, if the amount of the benefit is higher than the SMI  at any time. 

If the salaries, wages, pensions or payments were taxed with permanent or temporary discounts of a public nature according to fiscal, tax or Social Security law, the net amount received by the entitlement holder, having deducted the above, will be used to govern the amount confiscated.

The general rule will exclude those cases where the sentence orders the payment of maintenance allowances whenever the obligation for paying them comes directly from the law, including rulings given in annulment, separation or divorce processes on maintenance allowances due to the spouse or children. In these cases, as well as relevant precautionary measure cases, the legal body will determine the amount that can be confiscated.

Is it not possible to confiscate the minimum professional wage?

Generally, it is not possible to confiscate the amount of the pension that does not exceed the current SMI , applying the relevant percentages to be deducted from the amounts that exceed this SMI.

How are the amounts to be confiscated from the pension determined?

Deductions will be made by applying the scale set out in art. 607 of the Code of Civil Procedure.


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