Global

Details

  • Service: Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 2/21/2013

Spain - Pensions must count work performed in EU countries 

February 21:   The Court of Justice of the European Union (CJEU) today issued a judgment concluding that EU law precludes the Spanish method for calculating retirement pensions because Spain’s method does not take sufficient account of the fact that the individual worked in an EU Member State other than Spain. Gonzalez v. INSS, TGSS, C-282/11 (21 February 2013)

Read the judgment: C-282/11


Spanish law allows an individual worker to be entitled to a contributory retirement pension, provided that a minimum contribution period of 15 years has been completed.


The “basic amount” of the retirement benefit is calculated by adding together the worker’s contribution bases during the 15 years immediately preceding the last contribution paid in Spain, and by dividing that sum by “210” (which corresponds to a total of 12 ordinary contributions and two extraordinary contributions paid during a period of 15 years).


An individual challenged this method of determining retirement pension because it did not take into account the contributions that she paid while working in Portugal.


As explained today in a CJEU release [PDF 41 KB], because Spain’s method does not allow contributions paid by a worker in Portugal to be included in the calculation of the retirement pension to be paid by Spain, EU law precludes this method of calculating pension benefits.




©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now

Contact us