People with disabilities must contribute to pension plans under the special regime

The application of tax benefits for people with disabilities in the field of pension plans is not automatic. The Directorate General of Taxes (DGT) has specified the requirements necessary to access the exemption for income received under this concept.

What the DGT has ruled

The binding ruling addresses the possibility of applying the exemption provided for in Article 7.w) of the Personal Income Tax Law (LIRPF). The criteria establish that the exemption of pension plan benefits is strictly conditioned on prior compliance with the special financial regime for people with disabilities.

According to the resolution, if the contributions to the pension plan were made under the general regime, it is not possible to apply the special regime or the corresponding exemption, even if the person has a recognized disability. The regulations require that the choice of the special regime be made prior to making the contributions to the plan.

What it means for you

If you are a person with a disability and receive benefits from a pension plan, the tax treatment of that income will depend on how the contributions were managed at the time. It is not enough to prove the disability to obtain the exemption; it is imperative that the flow of capital to the pension plan was channeled through the special taxation regime.

In practical terms, if the contributions were made under the general regime, the income received will be taxed according to ordinary regulations, without the possibility of accessing the benefit of Article 7.w) of the LIRPF.

What you should do

Given this situation, it is necessary to verify the origin and the regime under which the contributions to your pension plans were made. It is fundamental to check whether the prior choice of the special regime was fulfilled to ensure the correct application of the exemption at the time of receiving the benefits. Since the regulations link the exemption to the modality of the contribution, each situation must be analyzed to determine its correct tax treatment.