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Taxation of 3rd pension pillar

The state refunds income tax on the contributions to the third pension pillar. Income tax is refunded on contributions not exceeding 15% of your gross annual income or 6,000 euros per year. This limit applies to contributions made by both yourself and your employer.

Are you making full use of
the 3rd pillar income tax incentive?

 
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You have exceeded your tax-free threshold. To review your saving solutions, come in for a consultation.

Register for a consultation We assume that your monthly contributions have been made throughout the year and that (if you select net salary) you have joined the 2nd pillar.
The basis of calculation is the valid income tax rate of 20%. The income tax incentive can be claimed on 3rd pillar contributions which are up to 15% of your gross income for the calendar year, but no more than 6000 euros per year. In order to obtain your refund you must submit an income tax return.

Income tax is only refunded if you have paid income tax throughout the year. If your entire income is exempt from tax and you do not pay income tax, income tax refunds are not possible. You must submit an income tax return in order to be refunded income tax.

The funds accumulated in the third pension pillar can be withdrawn at any time.

All taxable disbursements from the third pension pillar increase your annual income, based on which your basic exemption rate is calculated. Therefore, starting from 2018, third pension pillar disbursements may decrease or nullify your basic exemption. If the decrease in basic exemption has not been taken into account when paying taxes throughout the year, you will need to pay additional income tax for the decrease in basic exemption.

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Taxation of disbursements

  A disbursement made before five years have passed from the conclusion of the agreement or acquisition of the first fund unit A disbursement made after five years have passed from the conclusion of the agreement or acquisition of the first fund unit A disbursement in the case of
You are aged less than 55 You are aged 55 or above You are aged less than 55 You are aged 55 or above No work ability Liquidation of the pension fund or the insurance provider A payment made to a successor or a beneficiary
Lifetime disbursements of the pension - Exempt from income tax - Exempt from income tax Exempt from income tax - -
One-time disbursement 20% income tax 20% income tax 20% income tax 10% income tax 10% income tax 10% income tax 20% income tax

The legislation regulating the tax system may change in the future. Taxation depends on the individual circumstances related to the client, including their residence, etc.

During the saving period, it is possible to move between different third pension pillar savings solutions and service providers without paying income tax, unless a monetary disbursement is made to you during this period.

When moving between third pillar pension products, the 5 years necessary for being eligible for income tax incentive shall be counted as of the conclusion of the first insurance agreement or the acquisition of the first pension fund units.

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