More than 2,700 Belgians fell into pension tax trap

More than 2,700 Belgians fell into pension tax trap
© Belga

Last year more than 2,700 people paid an amount into their pension savings contract that gives them a lower tax advantage than they would have obtained by contributing a little less, reported De Tijd and L'Echo on Friday.

Last year, under the impetus of the then Minister of Finance, Johan Van Overtveldt (N-VA), the federal government added a new ceiling to pension savings: taxpayers could now contribute up to €1,230 per year, compared to a maximum of €960 previously, says L'Echo. In total, only 3% of savers chose to contribute more than €960.

Annual payments up to 960 euros were entitled to a tax reduction of 30% of the amount paid, while payments above 960 euros and up to 1,230 euros were entitled to a tax refund of 25% of the amount allocated to pension savings.

According to figures obtained by the daily newspapers from the Federal Public Finance Service, 2,742 people paid between more than 960 euros and 1,152 euros into their pension savings in 2018, which will give them a lower tax reduction than if they had limited their payment to a maximum of 960 euros.

However, the number of taxpayers falling into this tax trap is too small to compensate for the additional amounts that the State will have to pay to those who have not fallen into it. The scheme is under-funded by €1.27 million, whereas it was presented as budget neutral.

The Brussels Times

Copyright © 2023 The Brussels Times. All Rights Reserved.