Taxation and liquidity conditions

Retirement Savings Plans (PPR) vs. Open Pension Funds (FPA).

BBV Moderate Sustainable ISR awarded Best Open Pension Fund at Risk 3 in 2022

Best Fund Awards - Jornal de Negócios/APFIPP.
This award is the sole responsibility of the entity that awarded it.  Learn more at apfipp.pt under Best Funds Awards 2022 Winners List

Fund managed by the company BBVA Fundos - SGFP, S.A. The enquiry does not dispense with the legally required pre-contractual and contractual information. 

This disclosure is for publicity purposes and is made by BBVA Mediación, Operador de Banca-Seguros Vinculado, S.A., registered with the Insurance and Pension Funds Supervisory Authority (ASF) under code OV-0060, as evidenced on the ASF website, the entity responsible for marketing the BBVA Pension Funds, as broker of open pension funds, using the distribution network of Banco Bilbao Vizcaya Argentaria SA, Portugal Branch.

The tax regime presented below does not reflect the tax consultancy service provision, nor can it be interpreted as such.

The information does not exempt you from consulting the legislation in force at any time, nor does it constitute a guarantee that it will not be altered at any time before the date of redemption. This framing is non-binding for tax and judicial authorities and does not guarantee that these agencies will not be able to adopt contrary positions. It does not exempt the user from consulting article 21 of the Tax Benefits Statute.

A. Tax benefit upon subscription

Pursuant to article 21 of the Tax Benefits Statute, 20% of the amounts invested in Retirement Savings Plans or Open Pension Funds are deductible from the Participant's income tax declarations, with the following limits in accordance with the participant's age on January 1 of the fiscal year under the Tax Regime in force:
Age of the Participant Investment for maximum deduction Maximum income tax deduction(1)
Age of the Participant
Under 35
Investment for maximum deduction
€2,000
Maximum income tax deduction(1)
€400
Age of the Participant
From 35 to 50 years old (inclusive)
Investment for maximum deduction
€1,750
Maximum income tax deduction(1)
€350
Age of the Participant
More than 50 years(2)
Investment for maximum deduction
€1,500
Maximum income tax deduction(1)
€300

1) There is a 10% refund of this tax benefit for each year or fraction thereof:

- In the specific redemption conditions, when the age of the shares is <5 years, or made outside the specific redemption conditions regardless of the age of the units, except in the event of the death of the participant.

2) The following amounts are not deductible by taxpayers after retirement for income tax purposes.

Taxable Income after Family Quotient Limit Limit Increase
Taxable Income after Family Quotient
Up to €7,116
Limit
Unlimited
Limit Increase
Households with 3 or more dependents: 5% for each dependent or godchild who is not a taxpayer
Taxable Income after Family Quotient
From €7,116 to €75,009 (inclusive)
Limit
€1,000+[(€2,500 - €1,000)x[(€75,009 - Taxable Income after application of the Family Quotient) / €75,009-€7,116)]]
Taxable Income after Family Quotient
More than €75,009
Limit
€1,000
Deductions are subject to the general deductions limits for income tax collection, provided for in paragraph 7 of Article 78 of the CIRS, which vary according to the taxable income bracket of the taxpayer. This limit includes the sum of deductions for health expenses, education and training expenses, charges for property or homes, amounts relating to maintenance payments, invoicing requirements, and tax benefits.

B. Taxation at the time of redemption

1. Specific redemption conditions provided for by law

In case of full or partial redemption of PPR - rules applicable to the income from income tax category E.

Income paid in subscribed Shares Effective withholding rates
Income paid in subscribed Shares
Until 12/31/2005
Effective withholding rates
4%(1)
Income paid in subscribed Shares

Since 01/01/2006

Effective withholding rates
8%(2)

Autonomous rate of 20% on:

(1) One fifth of the income (1/5 * 20% = 4%)
(2) Two fifths of the income (2/5 * 20% = 8%)
 
Note: Retired participants who did not enjoy tax benefits at the time of subscription can request a redemption of the shares at any time, without any penalty.
2. Outside the specific redemption conditions
% of the value of subscriptions made during the 1st half of the contract in relation to the total value of subscriptions

Rates applicable to income (effective rates) depending on the years of validity of the 1st active share

% of the value of subscriptions made during the 1st half of the contract in relation to the total value of subscriptions
 
Rates applicable to income (effective rates) according to the years of validity of the 1st active share
<5 years
Between 5 and 8 years
>8 years
% of the value of subscriptions made during the 1st half of the contract in relation to the total value of subscriptions
<35%
Rates applicable to income (effective rates) according to the years of validity of the 1st active share
21.5%
21.5%
21.5%
% of the value of subscriptions made during the 1st half of the contract in relation to the total value of subscriptions
>35%
Rates applicable to income (effective rates) according to the years of validity of the 1st active share
21.5%
17.2%
8.6%
Note: Return of the tax benefits obtained in the subscription with an increase of 10% for each year or fraction after the redemption.

C. Redemption Conditions

Specific redemption conditions provided for by Law

  • 60 years
  • Retirement due to old age*, with 5 years elapsed on each delivery 
  • Serious Illness, Incapacity for Work and Long Term Unemployment**  
  • Refund of installment of own and permanent housing loans 
  • Death of the Participant 
  • Outside the situations provided for in the previous points

* Participant or Spouse, with the PPR being a common good of the couple. 

**Of the participant or any member of his or her household 

A. Tax benefit upon subscription

Pursuant to article 21 of the Tax Benefits Statute, 20% of the amounts invested in Retirement Savings Plans or Open Pension Funds are deductible from the Participant's income tax declarations, with the following limits in accordance with the participant's age on January 1 of the fiscal year under the Tax Regime in force:
Age of the Participant Investment for maximum deduction Maximum income tax deduction(1)
Age of the Participant
Under 35
Investment for maximum deduction
€2,000
Maximum income tax deduction(1)
€400
Age of the Participant
From 35 to 50 years old (inclusive)
Investment for maximum deduction
€1,750
Maximum income tax deduction(1)
€350
Age of the Participant
More than 50 years(2)
Investment for maximum deduction
€1,500
Maximum income tax deduction(1)
€300

1) Redemptions of contributions less than 5 years old have tax benefits increased by 10% for each year, except in case of death of the participant.

2) The following amounts are not deductible by taxpayers after retirement for income tax purposes.

Taxable Income after Family Quotient Limit Limit Increase
Taxable Income after Family Quotient
Up to €7,116
Limit
Unlimited
Limit Increase
Households with 3 or more dependents: 5% for each dependent or godchild who is not a taxpayer
Taxable Income after Family Quotient
From €7,116 to €75,009 (inclusive)
Limit
€1,000+[(€2,500 - €1,000)x[(€75,009 - Taxable Income after application of the Family Quotient) / €75,009-€7,116)]]
Taxable Income after Family Quotient
More than €75,009
Limit
€1,000
Deductions are subject to the general deductions limits for income tax collection, provided for in paragraph 7 of Article 78 of the CIRS, which vary according to the taxable income bracket of the taxpayer. This limit includes the sum of deductions for health expenses, education and training expenses, charges for property or homes, amounts relating to maintenance payments, invoicing requirements, and tax benefits.

B. Taxation at the time of redemption

1. Specific redemption conditions provided for by law

In case of full or partial redemption of FPA - rules applicable to the income from income tax category E.

Income paid in subscribed Shares Effective withholding rates
Income paid in subscribed Shares
Until 12/31/2005
Effective withholding rates
4%(1)
Income paid in subscribed Shares

Since 01/01/2006

Effective withholding rates
8%(2)
Autonomous rate of 20% on:
(1) One fifth of the income (1/5 * 20% = 4%)
(2) Two fifths of the income (2/5 * 20% = 8%)

C. Redemption Conditions

  • Pre-Retirement;
  • Early retirement;
  • Retirement due to old age;
  • Serious Illness, Incapacity for Work and Long Term Unemployment*;
  • Death of the Participant.

* understanding these concepts in terms of the legislation applicable to PPR products and only applicable to the participant.

Retirement calculator

Calculate your Retirement Pension and design your Savings Plan
Tools that help you plan your contributions so that you can enjoy the standard of living you desire in your retirement.

Comparative table

Differences between Reforma Poupança savings plans and Open Pension Funds
Both scenarios offer tax advantages, and the difference essentially lies in terms of money provision and repayment.

Warnings to the investor

  • There is no capital or revenue guarantee in the following BBVA pension funds.
  • It is only possible to redeem funds from the following Open Pension Funds: BBVA Sustentável Conservador ISR [BBVA Conservative Sustainable Socially Responsible Investment], BBVA Sustentável Moderado ISR [BBVA Moderate Sustainable Socially Responsible Investment] and BBVA Multiativo Moderado [BBVA Moderate Multi-asset] as provided for by law. Amounts can be redeemed from the Retirement Savings Funds BBVA Estratégia Capital PPR [BBVA Capital Strategy Retirement Savings Plan], BBVA Estratégia Acumulação PPR [BBVA Accumulation Strategy Retirement Savings Plan] and BBVA Estratégia Investimento PPR [BBVA Investment Strategy Retirement Savings Plan] at any time, subject to the applicable tax penalty and redemption fee, as defined in the Information Documents and Management Regulations, in accordance with the legal terms.
  • Subscription and redemption fees may apply.

BBVA Mediación, Operador de Banca-Seguros Vinculado, S.A., under code OV-0060 and registered with the Insurance and Pension Funds Supervisory Authority (ASF), as evidenced on the ASF website, is the entity responsible for marketing the BBVA Pension Funds, as broker of open pension funds, using the distribution network of Banco Bilbao Vizcaya Argentaria SA, Portugal Branch. The Information Documents (DI) and Management Regulations are available at any BBVA Branch and at www.bbvaassetmanagement.com/pt, www.bbva.pt, and www.asf.com.pt.

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