General overview of income tax and income inclusion and offsetting

The main taxable income categories
A person's income tax base is divided into two parts: the general tax base and the savings tax base.

General tax base

The general tax base comprises income from work and real estate rentals, as well as payments from certain financial instruments such as pension plans.

An incremental tax rate is applied to this base, which for 2017 was between 19% and 45% within territories under central-government jurisdiction (although, these rates may change depending on which Autonomous Community you live in).

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Savings tax base

The savings base applies to the majority of income from investments in financial products and is used to tax this type of income. The savings base is in turn divided into two sections. The first applies to income from financial products classified as investment income, and the second applies to capital gains or losses on transfers.

Income classified as investment income is primarily offset using funds from the same accounting item. Only if the final balance is negative can this income be offset using a credit balance from the capital gains or losses attributable to the savings base (albeit with a limit of 20% in 2017 and 25% from 2018 onward).

Likewise, capital gains or losses attributable to the savings base are also primarily offset using funds from the same accounting item and only if the final balance is negative can this be offset using a credit balance from investment income attributable to the savings base (albeit with a limit of 20% in 2017 and 25% from 2018 onward).
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An incremental tax rate is applied to the savings base that has three tranches and rates. In 2017, these rates were between 19% and 23%, irrespective of which Autonomous Community the taxpayer lives in.
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