Business · Markets · 23 hrs ago

Spain plans tax incentives for savings products that can lose capital

Spain plans tax incentives for savings products that can lose capital

Spain’s Economy Ministry plans two tax-favoured products to direct savings into investments.

They are intended to help fund productive investment in the European Union by widening its capital markets.

One product would allow tax-favoured contributions of up to €10,000 a year, but would require at least 30% to be invested in shares and offer no capital guarantee.

The other would allow up to €150,000 to be invested, with no annual contribution limit and no guarantee of getting the money back.

This is a change from existing long-term savings plans, which allow up to €5,000 a year and guarantee at least 85% of contributions at maturity.

The proposal comes as European financial authorities warn that share prices are high and markets could fall sharply.

The concern is that small savers could bear substantial losses while being drawn in by product names that suggest safety.

The source gives no details on when the products will be introduced.

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What people are saying

El País editorialEditorial opinion
No one knows when a major fall will come, but all analysts and authorities warn about it.
via El País
A more honest name would be “investment product without capital guarantee and with mandatory stock market exposure”.
via El País