Five ways to pay less tax on your investments

In Spain, a significant part of the profitability of your investments does not depend only on the markets, but on how tax-efficient structures work. For the same gross return, the most efficient portfolio is the one that leaves more money net in your pocket.

Below, we share five concrete action lines that you can apply (without doing anything illegal) before the end of the year and how they fit with inbestMe’s philosophy.

In some cases, you may consider reviewing your planning and preparing your strategy for the next year, which is about to start.

This should not be considered tax advice, but a set of general strategies applicable, in very broad terms, to most individuals residing in Spain. To analyze how to apply them to your specific situation, it is advisable to consult your tax advisor.

1. Take advantage of pension plans

Pension plans continue to be one of the few products that directly reduce the taxable base of the IRPF, as they are designed for this purpose.

General contribution limit: up to €1,500 per year per person (or 30% of earnings from work and economic activities, if lower).

If you have access to a company plan, the joint limit (individual + employment) can reach €10,000, depending on the contributions of the company and the worker.

Contributions reduce the taxable base today, and the money grows tax-deferred within the plan until withdrawal.

Practical advantages:

• You pay less IRPF while contributing.
• You defer taxation to the future (usually retirement), when your marginal rates are typically lower. The deferral can be complete (passing the taxation to your heirs) if you ultimately do not need it.
• The most common use is to complement the public pension with a portfolio specifically oriented toward retirement.

At inbestMe, pension plan portfolios are made by combining an indexed equity plan and a fixed-income plan with low costs, which allows alignment with the personalized risk level, while maximizing the tax incentive. During your life, the profile will adapt to you. Depending on your needs and savings capacity, you can complement them with a portfolio of indexed funds with the same profile.l.

Numerical example:

• You contribute €1,500 to your pension plan
• Your marginal rate is 30%
• You reduce your taxable base by €1,500
• Approximate IRPF savings: €450 per year

If you maintain this dynamic—contributing €1,500 to the plan each year—for 30 years, with a return of 6.8% (profile 10) for the first 20 and 5.8% (profile 7) for the next 10 years, the accumulated capital could reach about €133,700 before taxes according to the table above. During those 30 years, you would have deferred taxation on €45,000 contributed, temporarily saving about €13,500 in taxes, over which you have also earned additional return.

The final tax effect will depend on when and how you withdraw your pension plan, but as a general rule, the later you take it and the more in periodic income—rather than in a lump sum—the lower the tax impact at withdrawal and the greater the total tax savings.

If you want to dive deeper into this topic, we recommend reading:

• Take advantage until December 31 to improve your retirement.
• 7 keys to boost your retirement savings.

---

2. Don’t forget contributions to your spouse’s pension plan

This is one of the least used tax “tricks,” yet it can be very powerful in certain families.

You can contribute to a pension plan whose owner is your spouse and deduct it yourself, as long as:

• Your spouse has net earnings from work or economic activities below €8,000 per year, or has none.
• You respect the specific limit: up to €1,000 per year in contributions on their behalf, which adds to your own limit of €1,500.

Effect:

The money goes into your spouse’s pension plan, but the reduction in the taxable base of the IRPF is yours.

It is a way to balance retirement savings as a couple and make the most of a tax incentive that many do not even know about.

3. Plan capital gains and losses: use tax compensation to your advantage

In Spain, capital gains and losses from your investments (stocks, funds, ETFs, real estate, etc.) are included in the savings base and can be offset against each other.

Key ideas:

• Losses can reduce gains in the same year.
• If, after offsetting, you still have a negative balance, you can use up to 25% of investment income (interest, dividends…) to absorb it.
• If there is still a remaining negative balance, you can carry it forward for up to four years.

Numerical example:
Suppose in one year you have:

• Gains from selling funds/stocks: €5,000
• Losses from other sales: €3,000

Without offsetting:

• You would pay tax on the full €5,000
• At 19%: you would pay €950 in taxes

With offsetting:

• Net base: €5,000 – €3,000 = €2,000
• At 19%: you pay €380
• Tax savings by planning losses: €570 in one year

If you fall into one of these cases, you can contact cs@inbestme.com to see the possibility of helping you generate these types of offsets before year-end (only available for inbestMe Plus clients).

In inbestMe’s ETF portfolios, an intelligent tax optimization is automatically applied to allow this type of compensation within the same portfolio.

4. Review periodic income you don’t need and convert it into gains that accumulate

Many savers still keep a significant part of their money in products that generate annual income that is taxed year by year, such as deposits or remunerated accounts, without asking whether that money could be better “packaged.”

In general, it is more efficient to let gains accumulate within investment funds, instead of receiving dividends or coupons from stocks and bonds every year and going through the tax authorities repeatedly. However, this only makes sense if you do not need that income periodically; if you need it to supplement your income, this option is no longer applicable.

Examples:

Deposits and remunerated accounts

• The interest you receive every year is taxed as investment income.
• You pay taxes every year, even if you do not need that money yet.

Efficient portfolios and investments

• inbestMe’s savings, target, or bond portfolios are great options for a low-risk or very low-risk emergency fund, allowing income to accumulate within the portfolio.
• In the case of investment fund portfolios, you benefit from tax deferral and can optimize your investments via transfers: you can transfer excess to other portfolios, for example, without paying taxes along the way.

What “convert income into gains that accumulate” means:

• Instead of receiving interest every year and paying taxes on it, you move part of that savings into a portfolio where returns accumulate within the vehicle.
• You postpone taxation until the moment you really withdraw, allowing compound interest to work on a larger gross base.
• By using transferable funds, you can adapt the portfolio to market conditions and objectives without triggering liquidation taxes.

Simplified numerical comparative example:

• Emergency fund capital: €100,000
• Maintained for: 20 years
• Estimated gross annual return: 2.0%
• Tax rate on savings: 19%

Scenario A – Deposit with interest taxed annually

• After-tax return: 2% × (1 – 0.19) ≈ 1.6% annually
• Final capital after 20 years: ~€137,000

Scenario B – Fund portfolio that accumulates and is taxed only at the end

• Gross capital after 20 years at 2%: ~€149,000
• Additional accumulated capital after 20 years: ~€12,000
• Tax at 19% on gain: ~€9,300
• Final net capital: ~€139,700

Result: same gross return, same horizon, but tax deferral leaves €2,700 more in your pocket over 20 years on €100,000.

inbestMe’s savings, goal, and bond portfolios allow building this type of transition for immediate or short-term objectives: from “income taxed every year” → “accumulated returns with tax deferral.” Additionally, along the way, we can transfer part of the excess accumulated in the emergency fund (in scenario B, €49,000 instead of €37,000) to higher-yield investment options, transferring again and deferring taxation, which can increase the final net amount. Following the example, €12,000 accumulated for 10 more years at 6% becomes €21,000.

Diversified index fund portfolios also allow this tax efficiency for longer terms: they reduce generation of periodic taxable income and concentrate taxation at the moment of withdrawal, taking better advantage of compound interest over time.

5. Structure your wealth by goals… and also by tax efficiency

Tax efficiency is not about isolated tricks, but structuring your wealth sensibly:

Short-term (0–2 years)

• Emergency fund and planned expenses. Avoid unnecessary risks.
• A conservative Savings Portfolio can be an alternative to accounts and deposits, with a reasonable balance between risk, expected return, and liquidity.
• You transfer the accumulated excess from the emergency fund to the next “term.”

Medium-term (3–10 years)

• Goals such as down payment for a home, children’s education, personal projects…
• Here it makes sense to use goal or bond portfolios for shorter terms or diversified investment fund portfolios, where you can adjust risk and take advantage of tax deferral from transfers.

Long-term / retirement

• Complement the public pension, generate a stable future income…
• Indexed pension plans (including, when appropriate, contributions to the spouse’s plan) can play a key role in annual tax savings and long-term capitalization.

inbestMe is specifically designed to:

• Assign a specific portfolio to each goal, with an appropriate risk level.
• Choose the most tax-efficient vehicle for each type of goal (funds, ETFs, pension plans, savings portfolios).
• Keep costs low, like those at inbestMe, so a larger part of the generated return stays in your pocket.

6. Deepen with our webinar together with TaxDown

A few weeks ago, we held a webinar with TaxDown in which we explained which actions you can take before December 31 to reduce your 2025 tax bill. In this session, we talked about:

• Contributions to pension plans
• Compensation of losses and gains
• Housing and property sales
• Main deductions
• Personal or family changes that may affect your tax return

📺 You can watch it on our inbestMe YouTube channel:

Additionally, in the webinar you will find an exclusive QR code that allows you to enjoy a 35% discount on all our plans. If you want to participate in future webinars, follow us and stay up to date.

Annual reassessment and personal adaptation

Tax regulations may change annually, and each personal case is different. This article is informational and general in nature and does not constitute personalized tax advice. Before making significant decisions, it is advisable to compare with your situation and preferably with a tax advisor or the Tax Agency.

That said, the central idea is clear:

It’s not just about earning more, but keeping more of what you earn.

And here, combining good portfolios, low costs, and a smart tax structure makes a difference in the long term.