Adjustment with respect to the tax reduction for pension savings

Written by Nicolas de Limbourg 23 December 2015


A bill of law containing various provisions was recently submitted to Belgian Parliament. Amongst other measures this draft legislation contains a provision on the tax reduction for pension savings.

In 2014 the European Court of Justice ruled that, as the Belgian tax reduction for pension savings is only possible for payments made to Belgian institutions and funds, Belgium did not fulfil its requirements with respect to the free movement of capital.

As a reaction to this European case law, Belgium will extend the tax reduction for pension savings to payments in another Member State of the European Economic Area (EEA). Consequently, taxpayers who make payments to a foreign institution, which is located in another EEA Member State, will also be able to benefit from the Belgian tax reduction for pension savings. In order to be able to evidence that foreign institutions meet the qualifying conditions for the tax reduction, the foreign entities need to comply with a new information obligation.

The draft bill also enacts various Royal Decrees that have already been issued and contains several wording adjustments to numerous legislative tax provisions in order to ensure the compliance with and consistence of of the tax system.