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V1291-22 7 June 2022 · SG de Tributación de las Operaciones Financieras Criterion in force
IRPF · rendimientos del capital mobiliario

Fiscal treatment of IRA and ROTH IRA: taxation, Wealth Tax and Model 720

A Spanish tax resident with US nationality enquires about the fiscal treatment of their IRA and ROTH IRA. The DGT states that IRA is taxed exclusively in the US as a public pension, while ROTH IRA is taxed in Spain as capital gains.

The question raised

Possibility of applying the reduction in the Personal Income Tax (IRPF) taxable base for the contributions made. Taxation of benefits in the IRPF. Taxation in the Wealth Tax. Obligation to report in Form 720.

The DGT's ruling

IRA income, linked to public functions, may only be taxed in the United States pursuant to the Convention. The ROTH IRA, as it is not a pension plan regulated in Spain, generates returns on movable capital based on the difference between the capital received and the contributions. Both products must be included in Form 720 as they allow for redemption at any time, being assimilated to life insurance.

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