Pension savings and taxation: 2019 declaration and benefit

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Saving in view of building up a supplementary pension has become essential. Pension savings also entitle you to a tax benefit. But how can you receive this benefit, how much does it amount to and how can you get the most from it?

There are many ways to save for a supplementary pension: you can have a pension savings or a long-term savings, set money aside in a savings account, invest in property, etc. Pension savings also allow you to benefit from a little something extra in the form of a tax credit.

Insurance or account

For your pension savings, you can contact an insurer (pension savings insurance) or a bank (pension savings account). An insurance policy will usually have a guaranteed return, whereas the return on an account will depend on the results of an underlying pension fund. An account could therefore bring you more than an insurance policy, but could also bring you less.

Tax benefit

Last year (tax year 2019) you had two options:

  • a maximum of € 960, with a tax benefit of 30% (+ municipal taxes).
  • between € 960 and € 1,230, with a tax benefit of 25% (+ municipal taxes).

This year again (2019 income, 2020 taxation year), you have two options:

  • Either you opt for the classic pension savings plan: the payments which entitle you to a tax benefit are capped at €980. The tax credit is calculated at the uniform rate of 30% (+ municipal taxes).  In other words, your tax benefit for a premium of €980 will be a maximum of €294 (+ municipal taxes).
  • Or you opt for the new plan: you can pay up to €1,260. You will receive a tax benefit of 25% (+ municipal taxes).  In other words, your tax benefit for a premium of €1260 will be a maximum of €315 (+ municipal taxes).

Note that if you choose the second option, be sure to pay more than €1,176. Under this amount, you will receive a higher tax benefit via the traditional pension savings plan.

However, you will not have to pay the maximum premium. You can also pay less if you wish. But your tax benefit will inevitably decrease in this case. There is no minimum amount.

Finally, you will not receive a tax benefit the year you reach age 65.

Conditions

You must meet several conditions in order to receive a tax benefit:

  • You must be an inhabitant of Belgium or another member state of the European Economic Area when you take out the pension savings contract.
  • You must be at least 18 years of age and under age 65 at the time of the conclusion of the pension savings contract.
  • You must have had the account or pension savings insurance for at least 10 years.
  • You must be the beneficiary in the case of survival. In the event of death, the beneficiary must be described as follows:
    •  when the savings insurance contract is used to reconstitute or secure a loan for the acquisition or preservation of real estate:
      • for the sum insured which is used to reconstitute or guarantee the loan: the persons who, following your death, obtain the full ownership or usufruct of this property;
      • for the remainder of the insured capital: your spouse or legally cohabiting partner or blood relatives up to the second degree
    • in all other cases, your spouse or legally cohabiting partner or blood relatives up to the second degree

Declaration

You will have to indicate the total amount of your payments for the year in question in your declaration.

Statement

Each year, your bank or insurer will issue a statement (no. 281.60) listing your payments. You must provide the tax authorities with this statement upon request.

Declaration not compulsory 

You do not have to declare your premium payments for your pension savings. If you never do so, your final capital will not be taxed. But of course, you will never have received a tax benefit.

Note that if you have received a tax benefit, even just once, you will have to pay the tax on your final capital.


With pension saving you pay less taxes and also save for later. Read all about NN's pension saving solution here.