Requirements for tax reduction on contributions to protected assets

The Directorate General of Taxes (DGT) has clarified the procedure required so that contributions made to the protected assets of a person with a disability can benefit from the reductions provided for in the Personal Income Tax (IRPF) regulations.

What the DGT has ruled

The query concerned the possibility of granting a single public deed stating a commitment to make future contributions, in order to apply the tax reduction in each corresponding fiscal year. The DGT's criteria is negative: it is not possible to apply tax benefits by reflecting future or unmade contributions in a single document.

For contributions made after the establishment of the protected assets to comply with the formalities required by Law 41/2003, each one must be carried out individually. This implies that each contribution must be recorded in a public document authorized by a notary or through a judicial resolution.

What this means for you

If you are an individual wishing to make contributions to the protected assets of a person with a disability to obtain a reduction in your IRPF taxable base, it is not enough to record an intention or a commitment to deliver funds in an initial deed. Compliance with tax requirements demands specific formalization for each movement of capital.

Failure to comply with this formality leads to the loss of the right to the reduction provided for in Law 35/2006, as the administration requires that the reality of the contribution coincides with the documentary formality required by disability regulations.

What you should do

When intending to make these contributions, it is necessary to observe the following points:

• Ensure that each contribution is formalized through a public document before a notary.
• Do not rely on future contribution clauses contained in the deed of establishment for tax reduction purposes.
• Assess the particular situation of each contribution to ensure it complies with Law 41/2003 and Law 35/2006.