B Law & Tax
08 May 2023

Tax advisor: Application of the transitory regime of the eleventh additional provision of the Personal Income Tax law even if there is an automatic extension or periodic renewal in group insurance.

Until now, the Directorate General of Taxes had maintained that the extension or periodic renewal of temporary renewable insurance policies meant a new insurance and, therefore, the seniority of the initial contract was not maintained, not applying the transitional regime foreseen in Law 35/2006. However, ruling 1665/2020 of the Supreme Court has modified this criterion in relation to renewable temporary group insurance policies that implement pension commitments contracted prior to January 20, 2006.

In these cases, the transitional regime of the eleventh additional provision of Law 35/2006 will be applied to the benefits derived from such insurance as long as the requirements are met and there has not been a variation in the pension commitment or other contractual modification that determines the termination or resumption of the insurance relationship.

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