Article 64 of the Program Act of 22 June 2012 (B.S. 28.06.2012) has changed the tax rates applicable to lump-sum payments and surrender values of employer or company-sponsored pensions (i.e. second-pillar complementary pensions). The tax efficiency related to these types of pension plans results from the advantageous tax rates applied to deferred income. Depending on the beneficiary’s age upon payment, different tax rates apply (10%, 16.5%, 18%, 20% or progressive rates).
The new tax treatment applies to lump sums and surrender values ‘paid or vested’ as from 1 July 2013. The notion of ‘vesting or payment’ is thus an important element in determining the applicable tax rate.
As the notion of ‘payment or vesting’ may give rise to interpretative difficulties, the Belgian tax authorities have now issued a practice note which, by means of practical examples, aims to clarify what needs to be understood under the notion ‘payment or vesting’ of second-pillar complementary pensions in the light of the above legislative amendments.
As an example, the practice note indicates that the obligatory notification based on article 26 §4 of the Act on Supplementary Pensions sent by an insurance company indicating the pension amount to be received and payment procedure, is not considered as a payment. More examples can be found in the guidelines: Circulaire AAFisc No. 37/2014 (no. Ci.RH.244/628.304) dated 09.09.2014 (NL); Circulaire AGFisc No. 37/2014 (no. Ci.RH.244/628.304) dated 09.09.2014 (FR).