Early retirement: what tax rate is your additional pension capital subject to?

The tax rates on taking supplementary pension in the event of early statutory retirement have changed. Any individual entering retirement at the end of a full career lasting 45 years but who has not yet reached legal retirement age (currently 65 [1]) shall no longer be subject to unfavourable tax treatment when taking their supplementary pension capital.

Early retirement: what tax rate is your additional pension capital subject to?

Amendment to the law

The Law of 27 February 2019 [2] stipulates that these persons shall no longer be subject to unfavourable tax treatment when they take their supplementary pension capital. They are able to take advantage of the preferential rate of 10.09% since 1 January 2019.

In specific terms, the following tax rates [3] are applied when taking a supplementary pension:

  • For pension capital accumulated through personal contributions:
    • 16.66% for the part of the capital accumulated through personal contributions prior to 1 January 1993;
    • 10.09% for the part of the capital accumulated through personal contributions from 1 January 1993.
  • For pension capital accumulated through employer contributions:
    • 10.09% on reaching statutory retirement (currently 65 years of age) or early statutory retirement following a full career lasting 45 years, provided that one remains professionally active until (early) statutory retirement age and only then takes the supplementary pension;
    • 16.66% on reaching early statutory retirement at 62, 63 or 64 years of age after a career lasting less than 45 years;
    • 18.17% at 61 years of age, prior to statutory retirement and after a career lasting less than 45 years;
    • 20.19% at 60 years of age, prior to statutory retirement and after a career lasting less than 45 years.

[1] Statutory retirement age will be increased to 66 from 2025, and to 67 from 2030.
[2] Law of 27 February 2019, B.S. 15 March 2019, p. 27124
[3] Rates for the one-off withholding tax on the gross pension capital (excluding profit sharing), including limited withholding tax on the municipal tax (surcharges); applicable if the capital is taxable in Belgium on payment.

Saskia Defreyne

We are there for you.

For more information, please contact us on 03 217 67 67 or via ebservices@vanbreda.be.

Subscribe to our newsletter.