Dutch Tax Administration to tax pensions of Belgian workers working in the Netherlands

Part of the supplementary pension of Belgian workers, previously working in the Netherlands, will be taxed by the Dutch Tax Administration (the “DTA”).
The DTA confirmed this on Thursday.

The Belgian and Dutch government treasuries are engaged in a tug of war around the second pillar of the pension. This was reported on Thursday in Belang Van Limburg. As part of an agreement between the two countries, such pensions are currently taxed in Belgium, but the DTA considers that this system is not taking shape as originally anticipated.

During the coming weeks, 4,000 retired Belgian workers, who worked in the Netherlands during their working lives, will receive the same letter. Such Belgians receiving a supplementary pension of more than €25,000 per year will no longer be exempt from tax with effect from January 1st, 2018.

The DTA confirms this information. However, it argues that this is not double taxation. “Although Belgium effectively does not tax some pensions in this category, the agreement gives the Netherlands a right to impose tax on such pensions if the total annual pension benefit for a given pension exceeds €25,000.”

The DTA further states, “The ruling from the highest Belgian jurisdiction [the Belgian Supreme Court] is that the Belgian tax authorities could not, in given situations, impose tax upon supplementary pensions of more than €25,000.” Specifically this tax regime applies to pensions set up before January 1st, 2004, the date that the law on supplementary pensions came into force in Belgium.

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