Re: SPANISH PENSION CONTRIBUTIONS
 

Had a quick chat with an analyst at work and he tells me that it's worth waiting until next year (even if it means missing out on the desgravación this year) because they are changing the rules and allowing you to access your money before the term ends (your money isn't tied up with the same plan). Also he says beware of taxes when the plan matures - you may save taxes now, but you might also end up paying them later when you withdraw from the pension.

Re: SPANISH PENSION CONTRIBUTIONS
 

OK just received this from Money Saver Spain (which you may like to look at for other stuff Money Saver Spain | Save On Everything In Spain)

'This Week’s Top Tip............

As the end of the fiscal year approaches, if you’re a taxpayer in Spain, think twice if you’re tempted to take out a pension plan in order to save on your tax bill. In Spain pension plans have the following problems:

You won’t be able to get your money out until you retire. The only exceptions are situations such as long-term unemployment or serious illness (and then you’d have to go through the bureaucratic paperwork).
Low interest rates coupled with high commission.
Although payments into a pension plan help you reduce your annual tax bill now, when you retire income from a pension plan is taxable in the same way that salaries are. This means that you could end up paying more tax than what you save.

You may be aware that changes to pension plan legislation will be introduced next year, with the main difference being the possibility to get money out after 10 years. However this will only apply to money that is put into a pension plan from 1 Jan 2015. '

So not looking so good, but seeing an 'expert' Monday so maybe more to follow.....

Re: SPANISH PENSION CONTRIBUTIONS
 

OK I saw the expert today – anyone who is fiscally resident in Spain can make payments into an approved pension scheme (effectively an investment) which will save tax payable in the annual declaracion. Most Spanish banks are currently pushing these options -
The key questions are:
How much is the investment going to make?
Is it guaranteed?
How much commission is there to pay?
When can it be taken back out of the scheme?
What happens in the event of death before maturity?

Then of course it will be taxed at the (then) current tax rates – so it is not tax free!

So it is possible to save paying tax in the short term but eventually tax will have to be paid, so not as beneficial as AVCs that I paid in the UK.

Anyway if anyone is interested I suggest you talk to your bank or a professional tax/investments advisor.