At this time when we are starting the income tax campaign for the year 2022, at addwill we consider it important to remind our clients who are self-employed that the government has increased the deduction limit for contributions to pension plans for self-employed individuals for the year 2023.
The First Final Provision of Law 12/2022 of June 30, on regulation for the promotion of employment pension plans, has amended the consolidated text of the Law on the Regulation of Pension Plans and Funds, approved by Royal Legislative Decree 1/2002, of November 29, incorporating the amendment to Law 35/2006, of November 28, on personal income tax, particularly in Article 52.1 and additional provision sixteenth, on the limits of reduction and the financial limit of contributions to social security systems, respectively, with effect from January 1, 2023.
Starting in 2023, self-employed individuals can make additional contributions to new sectorial or simplified pension plans for self-employed individuals, allowing them to take better advantage of the tax incentive.
So far, employers and self-employed workers were disadvantaged by the new contribution limits. Only if the self-employed individual set up an employment pension plan for their workers and was the promoter, he could make his own contributions to the plan and deduct them in his personal income tax return. As of 2023, improvements have been introduced that benefit this group and will allow them to take better advantage of the incentive.
Self-employed individuals can make additional contributions of up to 4,250 euros to new sectorial pension plans for self-employed individuals or to new simplified pension plans promoted by self-employed associations or federations, or by unions, professional associations, or mutual societies in which the participants are exclusively self-employed individuals. Additionally, they can continue to make contributions to their personal pension plans for a maximum of 1,500 euros, bringing the maximum amount per year to 5,750 euros.
At addwill, we recommend that self-employed individuals verify whether it is in their interest to take advantage of any of the new plans of this type that are being set up and thus, pay less in their personal income tax return for 2023. We are at your disposal to advise and help you make the best decision based on your needs and particular circumstances.
If you want to learn more on this matter, you can contact our labor department through email at laboral@addwill.eu or by phone at +34 93 487 52 00, or if you prefer, you can contact us through our form by clicking here.