Private pensions, salary contribution exempt from tax - Every employee can "save" up to 500 euros per month
Every individual who contributes to private pension schemes is relieved of the tax they pay on employment income.
Referring to the new instruction of the Ministry of Finance, "the amount that is deducted from the salary and paid by the employer or employee to the voluntary pension funds as the employee's contribution is deducted from the employee's personal income for tax purposes.
Specifically, if an individual has a monthly salary of 1 thousand euros per month, and allocates 100 euros as a contribution to a private pension fund, his salary will be taxed at the level of 900 euros.
The instruction also states that contributions made by the employer and any other contributor, on behalf of and for the account of a member of a pension fund, are not considered as the member's personal income for fiscal purposes.
But it also stipulates that the amount deducted from the salary as a contribution for the employee to the voluntary pension funds should not be greater than the minimum wage at the national level. In other words, regardless of the salary, every employee can "save" and pay as a contribution to a private pension, a maximum of 500 euros per month.
For the deductions made, the employer must have supporting documentation, such as: the Contract with the voluntary pension fund and the Certificate/document issued by the voluntary pension fund, which certifies that these deductions have been paid into this fund.
The certificate is submitted once a year for the entire tax year in which contributions are paid to the pension fund, by January 20 of the following year.
This documentation must be maintained at all times and made available to the tax administration if requested.
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