Taxation: how much is the tax on a branch 23 product?

You invest a certain sum in a branch 23 product, whose return is linked to one or more funds. Does this provide you with a tax benefit? And what are the taxes linked to this type of policy?

Tax benefit 

The premiums paid in the framework of branch 23 life insurance are not tax deductible, except in the case of pension savings insurance.  In this case, you have two options for the 2020 taxation year (2019 earnings): 

  • Either you opt for the classic pension savings plan: the payments giving the right to a tax benefit are capped at 980 euros. This maximum is independent of your professional income and tax benefits in the framework of a housing credit. The tax credit is calculated at the uniform rate of 30%
  • Or you opt for the new plan: you can pay up to €1,260. You would receive a tax benefit of 25%. 

In the long-term savings, your maximum premium is calculated on the basis of your income. For example, in 2019 you can deposit a maximum of € 176.40 + 6% of your net professional income, with an absolute maximum of € 2,350.

Withholding tax

The return on a branch 23 product is exempt from withholding tax. There is a significant difference with respect to a branch 21 product, which is subject to a withholding tax of 30% if the policy has not been in force for more than 8 years. You can therefore also avoid the withholding tax with a branch 21 product by keeping the policy for more than 8 years or by taking out supplementary death insurance of 130%. 

Tax on premiums

Each premium payment in the framework of a branch 23 product is subject to a 2% tax. It goes without saying that this tax will have an impact on your return. There is no tax on premiums in the case of pension savings. 

Fees

It is also possible that you may have to pay entry, management and exit fees. These will depend, however, on the product and the company chosen by you.


Read more about NN's Branch 23 insurance here.

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