State Secretary decree on reducing tax for pensions of intergovernmental organisations

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.

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