Spain to give companies tax boost for pensions
SPAIN - Spain looks set to introduce new rules on occupational pension schemes in the New Year after approval in the senate on rules to equalise pension fund board membership as well as give a tax boost to companies making pension contributions.
Angel Martinez, head of Inverco, the Spanish pension and investment funds regulator, says one of the main points of the new legal amendments is that employers will now get 50% representation on trustee boards.
“Up until now this has been in favour of the workers and the unions, but it will now be paritary with 50 employer/50% union representation.”
The other major legal change is a new tax deduction in corporate tax law in favour of companies that make contributions in favour of occupational pension plans.
“This will be a10% deduction to add to the present situation whereby contributions are already considered as expenses in the light of corporate tax, so it should be a double benefit as tax deduction and expense.”
Martinez says the rules have been approved by the senate and will now go to the congress of deputies next week.
“We don’t expect any problems with these law changes due to the majorities that the government has. So we can 99,95% assume that these amendments will be approved and could come into law on January 1.”
Limits on annual pension contributions for workers over 52 years have also been approved.
Martinez explains: “In Spain, a lot of people only made contributions when they got to 40-45, and the law says the pension is based on the last fifteen years of contributions. The government is saying that as many people did not have the possibility to make those contributions this will give them the possibility to make the necessary contributions to cover their whole working life.”