As from 1 January 2012, the draft Finance Act (whose text has now been sent to the Senate) introduces a special social security contribution on premiums and contributions paid to occupational pension schemes. This special contribution amounts to 1.5% on the amount of premiums/contributions exceeding a threshold of EUR 30,000.00 per annum (amount to be indexed annually). The same special contribution (1.5%) and threshold apply for self-employed company directors. Note, however, that the contributions paid into the “Vrij Aanvullend Pensioen voor Zelfstandigen” / “Pension Libre Complémentaire des Indépendents” will not be taken into account for the threshold of EUR 30,000.00.
With effect as from 1 January 2016 (or earlier if determined by Royal Decree), the above will be abolished and replaced by the following regulation. A contribution of 1.5% will have to be paid on premiums/contributions paid for occupational pension built up if the “pension target” (and thus no longer the nominal threshold) has been exceeded on 1 January of a given year. In other words, to the extent that the sum of the statutory pension and occupational pension rights for a given year is higher than the pension of a civil servant (taken into account the period of service of the employee), the special social security contribution will be due on the contributions made in that given year. The latter will also apply for self-employed company directors.
Non-deductibility of premiums
Sigedis is empowered to, amongst other things, verify the deductibility of premiums made in the scope of occupational pension schemes, i.e. the so-called 80% rule. In order to enable them to do so, certain data needs to be provided to Sigedis (Royal Decree of 25 April 2007). To the extent that these data is not provided to them, the related premiums will not be deductible in the hands of the company (irrespective of compliance with the 80% rule). The same applies for internal provisions and pensions/annuities paid directly by the company.
Applicable tax rate on the payment of an occupational pension capital
The current tax rate on the payment of occupational pension capitals (funded with employer’s/company’s premiums) of 16.5% will be increased to 20%, if the capital payment takes place at age 60, or 18%, if the capital payment takes place at age 61. For payments as from age 62 (or payments as a result of decease or retirement), the tax rate of 16.5% remains. For the sake of completeness, the tax rate of 10% (and related conditions) remain in place.
Internal funding of occupational pension schemes
As from 1 January 2012, internal funding of occupational pension schemes will be prohibited. Existing internal provisions can be externalised to an insurance company, pension fund or another institution for occupational pensions. This externalisation will in principle give rise to a premium tax of 4.4%. However, this draft Finance Act provides for an exemption of this premium tax. Besides, internal provisions reported in the accounts of the company at the end of the accounting year with closing date before 1 January 2012 will be taxed at 1.75%. If certain conditions are met, this taxation can be spread over the following three taxable periods (the tax rate will then amount to 0.60% per taxable period).
Note that the above taxes cannot be considered as deductible professional expenses in the hands of the company.