07/2018: BACKSERVICE PREMIUMS REMAIN FULLY DEDUCTIBLE

Managers often receive an individual pension scheme (IPS) from the companies for which they work. As part of the scheme, the company pays premiums to the insurer, which then uses these contributions to build a supplementary pension for the manager.

These premiums are tax-deductible and the pension capital to be built up (legal and supplementary) is never permitted to exceed 80% of the last gross annual salary.
It often happens that building this kind of supplementary pension begins at a time later in the professional career. The risk here is that several operational years may be lostBackservice was created to fill this gap. Backservice consists of premiums that compensate for the ‘lost years’ and which can be paid to the insurer in one go. At the same time, they are also tax-deductible in one go.

This latter point ran the risk of being compromised by the corporate tax reform at the end of last year, whereby costs not fully related to a taxable period could only be deducted over time. However, the Ministry of Finance has confirmed that this new provision does not apply to the payment of backservice premiums. They therefore remain fully deductible in the year of payment.

Do not hesitate to contact us should you have any additional questions and/or comments.

 

Jill Engelen

About Jill Engelen

In BOFIDI Jill is the central point of contact for payroll and juridical advice about social legislation. You can find more information on B-HRMS via B-hrms@bofidi.com.