Mutual societies sneak into the 2023 income campaign. Following the Supreme Court ruling that recognized excessive personal income tax taxes for those who contributed to them in the sixties and seventies, the affected taxpayers will have a compensatory refund in the declaration.
The origin of the novelty is in the contributions to mutual societies made between 1967 and 1978 by bank workers. These contributions were not deducted from the personal income tax base as is the case with Social Security contributions. That is, in the eyes of the personal income tax, everything was taxed as income, despite being contributions to a system. Since the pension they receive today is taxed again by personal income tax, there was a second taxation on the same. The case was brought to justice due to the lawsuit of an employee and the Supreme Court ended up ruling him in favor, something that can be extended to other people in a similar situation.
"It has been recognized that making them pay taxes on the entire pension they receive represents a clear case of double taxation," says Fernando Santiago, president of the General Council of the Colleges of Administrative Managers. Any overpaid amounts must now be returned. This is reflected by leaving out of the calculation of the personal income tax payment the part of the pension that depends on these contributions and returning to the taxpayer the amounts paid in excess in recent years, since they were improperly included in the tax calculation. It will be done in the form of a reduction of the tax base in the declaration.
Santiago compares it with the most common situation among wage earners. "The payments we make to Social Security are deducted from gross income. Therefore, they are not taxed in the year they occur, but rather when we collect the pension." This pension is declared as income in the income tax return, so it is subject to personal income tax. As payments to mutual societies were not deducted and the income has already paid personal income tax in full, "the pension that generates that income should not be taxed again," he reiterates.
This decision of the Supreme Court "will also apply to employees who contributed to other similar mutual societies," he indicates. The Union of Technicians of the Ministry of Finance (Gestha) estimates that some 4.8 million mutual pensioners can benefit from the reduction. It mainly affects pensioners with retirement benefits from the National Social Security Institute or the Navy Social Institute; complementary pensions to those of Social Security or passive classes, and the supplements received by some civil servants paid by special funds from public entities.
For those affected, the Tax Agency launched a form before the start of the campaign to channel refund claims. "In the form it is only necessary to include a bank account number owned by the applicant and a telephone number," explains the Tax Agency. "With the presentation, the pensioner authorizes the Agency to carry out the calculations and procedures necessary to make the corresponding refund effective."
Santiago criticizes the impersonation of older people through the digital channel and points out that "it should be something that the AEAT does motu proprio." The Agency may request documents such as work history, pension certificate, income from years in use, certificates from the company where you worked and a bank account. "For the vast majority of those affected, it is a mess. They are people of a certain age, who do not know or want to know about taxes, who do not want trouble and who do not touch a computer," he criticizes.
Mutual members have the right to a refund of the overpaid "in the last four years, which are the ones that have not yet expired," he comments. Although you are not obliged to declare because the pension does not reach the minimum requirements, you can make the declaration and demand a refund. "The withholdings made will surely be higher than what would have been due," he explains.
Santiago does not dare to give figures on average refund amounts. "Each case is different and will depend on the years that he contributed to the social security mutual insurance company, the proportion of those years with respect to his working life, the pension that he is receiving...".
With this scenario, three assumptions can occur in this year's income.
First, those who claimed and obtained the positive opinion of the Tax Agency regarding previous years, "in which case the draft already contemplates the adjustment required for the year." Specifically, the pension collected with the reduction that would have to be applied.
Then, those who submitted the form, to whom the Treasury may recognize the right to rectification and the corresponding reduction will be applied, reflected in the same sections. "For some cases it is not fully calculated," it was noted at the press conference to present the campaign, this Wednesday. That is why the Tax Agency recommended that they not submit the declaration yet and asked that they wait a couple of weeks, until April 15-21. All to give time for your tax data to be cleaned and updated and to settle the tax with all the updated information on your situation. If the Tax Agency does not yet have the information for the calculation, notices will appear when consulting the tax data or within the draft that will specify it.
Finally, "if it has not yet been claimed, the Tax Agency will not apply the reduction in the draft and the taxpayer must request the refund through the form and present the income tax return at the same time," explains Santiago. The expert urges you to submit the form "as soon as possible", with the help of a family member or professional if necessary.
If you have questions, the Tax Agency has launched a portal with frequently asked questions and contact telephone numbers in which the main questions regarding this process are resolved.
