Supplementary pension lump sums - Rates of withholding tax

The Royal Decree of 23 May 2013 fixes the new withholding tax rates applicable to supplementary pension lump sums paid out or allocated as from 1 July 2013.

You will recall that the Programme Law of 22 June 2012 modified the fiscal regime applicable to supplementary pension lump sums composed of employer contributions (see our Newsletter of 6 July 2012). For pension lump sums paid out as from 1 July 2013 the following rates of withholding tax are applicable:

• 20% if the beneficiary is 60 years old at moment of payment(*);
• 18% if 61 years old at moment of payment(*);
• 16,5% if between 62 and 64 years old at moment of payment;
• 10% if 65 years old at moment of payment, provided the person effectively remains professionally active until then.

(*) unless payment of the pension lump sum coincide with legal (early) retirement, in which case the tax rate of 16,5% applies and the withholding tax rate of 16,66%

By Royal Decree of 23 May 2013, published in the Belgian Official Gazette of 30 May 2013, the rates of the withholding tax in Annex III of the RD/ITC 1992 were modified in order to take these new rates into account.

As of 1 July 2013 the following rates apply:

(**) Provided the person in question effectively remains professionally active until the legal retirement age

> Action point

As of 1 July 2013 new rates apply for tax and withholding tax on pension lump sums composed of employer contributions.