Hi All -- I'm the SoupNinja. Glad to be here.
Let me make a first impression by asking a crackingly boring question.
According to Vero, if a person makes voluntary pension contributions, those contributions (up to €5000) can be deducted from capital income.
So what happens if a person has no capital income? Is there no deduction allowed or is your capital income reportable as a negative €5000?
Voluntary Pension Deduction
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Hank W.
- The Motorhead
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Re: Voluntary Pension Deduction
A part of it deductable of your direct income... theres the guide at http://www.vero.fi you need to read the small print in.... magic word is alijäämähyvitys
Credit for deficit in capital income
Interest on loans is primarily subtracted from capital income (investment income). If the taxpayer´s capital income is small or zero, he will have a deficit in capital income and will thus qualify for this tax credit.
Credit for deficit in capital income
Interest on loans is primarily subtracted from capital income (investment income). If the taxpayer´s capital income is small or zero, he will have a deficit in capital income and will thus qualify for this tax credit.
Last edited by Hank W. on Wed Apr 16, 2008 1:35 pm, edited 1 time in total.
Cheers, Hank W.
sitting here like a lemon looking for a gin.
sitting here like a lemon looking for a gin.
Re: Voluntary Pension Deduction
Good on you Hank, thanks for the tip.
She's a beaut, Clark!
~Cousin Eddie
~Cousin Eddie
Re: Voluntary Pension Deduction
Hi, I've found out more about voluntary pension deductions, which I'll post here for posterity:
As others have posted on this forum, you can claim a capital income deficit on certain expenses such as interest on home mortgage. 28% of this is claimable as a tax credit up to a limit of €1400 (€1800 if you have one kid, €2200 if you have two or more kids).
Apparently VPD is treated separately from other deficit credits in capital income. If you make contributions to a private pension, up to €5000 of this is claimable as a deficit in capital income. So you are entitled to a tax credit of 28% of this amount: up to €1400.
So theoretically if you have zero capital income, have a mortgage, two kids and pay more than €5K/yr into a voluntary pension, you could claim a tax credit of €3600.
If you use the handy tax calculator on http://www.vero.fi, you can see this calculation worked out for you.
As with any piece of advice, always question the source. And I am a questionable source.
SoupNinja
As others have posted on this forum, you can claim a capital income deficit on certain expenses such as interest on home mortgage. 28% of this is claimable as a tax credit up to a limit of €1400 (€1800 if you have one kid, €2200 if you have two or more kids).
Apparently VPD is treated separately from other deficit credits in capital income. If you make contributions to a private pension, up to €5000 of this is claimable as a deficit in capital income. So you are entitled to a tax credit of 28% of this amount: up to €1400.
So theoretically if you have zero capital income, have a mortgage, two kids and pay more than €5K/yr into a voluntary pension, you could claim a tax credit of €3600.
If you use the handy tax calculator on http://www.vero.fi, you can see this calculation worked out for you.
As with any piece of advice, always question the source. And I am a questionable source.
SoupNinja
She's a beaut, Clark!
~Cousin Eddie
~Cousin Eddie