When a savings plan is redeemed, the return generated forms part of the income tax base and is subject to the following tax rates:
Client's residence for tax purposes
| | NAVARRA | BASQUE COUNTRY | Common Territory** |
Tax rate
(savings base) | Up to €6000..........18%
Above €6000...........21% | In Guipúzcoa
Up to €4000 .......20%
Above €4000................23%
In Vizcaya and Álaba*
Up to €10,000......20%
Above €10,000...................22% | Up to €6000 .......... 21%
From 6.001 to 24.000€.....25%
Above €24,000........................27% |
| Interest is subject to a withholding as a tax pre-payment | 19% | 21% | 21% |
* Pending approval
**Navarra and the Basque Country are subject to special tax regimes. The Common Territory refers to all other areas in Spain governed by central tax laws.
It should be pointed out that there are plans to apply a tax offset system for certain types of life insurance taken out before the 20th of January 2006 (1st of January 2007 in the Autonomous Communities of Navarra and the Basque Country).
In the event of the death of the insured party, the beneficiary will pay Tax on Inheritance and Donations on the sum of the insured capital received. Actual taxation depends on the Autonomous Community in which the insured party habitually resided.