31 March 2016
Saving for your pension: what are the tax advantages?
In Belgium, the authorities want to encourage citizens to save towards their pensions on an individual basis. That is why you can benefit from tax advantages linked to different pension savings options, such as the pension savings fund, pension savings insurance or long-term savings.
What are the tax advantages for me?
Specifically, 30% of your yearly contributions to your pension savings plan is refunded to you through a reduction in your tax*. If you have saved 500 euros in a year, you will receive a reduction in your tax of 150 euros. You can deposit up to a maximum of 940 euros per year in your savings plan for a maximum tax saving of 282 euros. The amount of this tax saving is deducted from the amount of tax you have to pay.
If you do not pay tax, you do not therefore benefit from this reduction. Similarly, your tax reduction cannot exceed the amount of the taxes for which you are liable: if the tax relief from your pension savings amounts to 282 euros and you only pay 200 euros in tax, logically your tax reduction cannot exceed this amount of 200 euros.
Your tax relief is subject to several conditions, for example:
- Age: you must be at least 18 and under 65 when you take out your plan.
- Term: the minimum term for your plan is 10 years.
- Income: you must have a regular, taxable income.
*Depending on your income.