State Secretary decree on reducing tax for pensions of intergovernmental organisations

19.08.22

The State Secretary has issued a decree (19 August 2022) regarding the reduced taxation of pensions from intergovernmental organisations.

Up to this decree, taxpayers had to sign an specific agreement (“Vaststelling Overeenkomst” or “VSO”) with the tax office (long story short), to allow them to apply a reduction on the taxable pension from their former employer (intergovernmental organisation), in accordance with a Supreme Court decision from 2009.

As from the date of the Decree, taxpayers are allowed to reduce the taxable pension immediately in their personal income tax returns.

Also, the computation of the capitalised amount in box 3 of the aforementioned pension reduction has become more favourable (in most cases).

Final note: we are still awaiting further Supreme Court decisions on the taxability in box 3, which will expectedly influence the capitalised amount also.

Disclaimer: Although this publication has been compiled with great care, Joop Dagevos and all other entities, partnerships, persons and practices trading under the name ‘Yodatax Expat Solutions’, cannot accept any liability for the consequences of making use of this issue without their cooperation. The information provided is intended as general information and cannot be regarded as advice.

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