The lack of financial culture in Spain is evident. You just must look at the published savings and investment studies in the country. Investment continues to be predominant in real estate assets and bank deposits, the first, of limited liquidity, and the second, of almost zero profitability. Safety is the most important decision factor.
Another important factor is the lack of independent financial advice. Before buying a house or contracting a bank deposit, very few people hire financial advisors to make the right tax risk, return, and cost decisions. Today it is still unknown for most of the population how the tax exemption for reinvestment in the habitual residence works. That is why the great beneficiaries are the Spanish public treasury and banks. While this is the case, it is difficult for the financial culture to improve and for people to be able to invest with more beneficial parameters of fiscal, financial profitability and risk.
Now, in the period for the declaration of personal income, there will be few taxpayers who will not pay taxes on the contributions of their companies to collective insurance of pension commitments, which have not been charged for tax purposes.
Those who are entitled will not have to declare up to 100.000€ in the contributions made in their favor and will not have to pay taxes. The capitalization with profitability called of compound interest rate will cause the capital year after year to be capitalized on the totality and not on the net capital after taxes.
It is not the same to have a profitability of 10% on 100.000€ than 10% on the net tax of 100.000€. In the first case, the resulting capital is 110.000€, whilst in the second case, the resulting capital is 55.000€. If the multiplication lasts all the time until retirement, the differences are huge.
The actuary and economist Jaume Quibus holds a master’s degree in Financial Economics and Accounting, a degree in Actuarial and Financial Sciences, a degree in Economic and Business Studies from the University of Barcelona and has completed the Management Development Programme at the IESE Business School of the University of Navarra. He is a full member of the following associations: the Catalan Actuarial Association, the Spanish Actuarial Association, the Catalan Economists Association, the International Actuarial Association, the Catalan Association of Accounting and Management and also a member of the IESE Business School Alumni. He was a founding partner in 1998 of the actuarial company Quibus, and is corporate member number 6 in the Catalan Actuarial Association.