Global

Details

  • Service: Tax, Global Mobility Services
  • Type: Regulatory update
  • Date: 4/2/2014

Netherlands - Voluntary savings (retirement) plan 

April 2:  A new voluntary savings plan, introduced for the portion of an individual’s income exceeding a cap of €100,000, has been approved by the lower house.

Background

Under Dutch law—the Reduction of Maximum Pension Accrual and Premium Rates and Maximum Pensionable Income Act (Wet verlaging maximumopbouw- en premiepercentages pensioen en maximering pensioengevend inkomen, referred to as the “WMO Act” or as Witteveen 2015):


  • The pensionable salary will be capped at €100,000 as of 1 January 2015.
  • The state pension offset then must be deducted from this amount.

This part of the government’s plans has remained intact. The cap will be indexed annually at the beginning of the calendar year and will be linked to the indexation of the minimum wage. The indexation will eventually be included in a ministerial decree.

Amendment

On 20 January 2014, the government presented a proposal to amend the WMO Act to the lower house, which approved it on 6 March 2014.


A new voluntary savings plan has been introduced for the part of the income exceeding the cap—i.e., the net annuity.


Therefore, it is possible to accrue a retirement provision that is almost equal to the annual gross pension accrual of 1.875% under an average pay plan.


  • The premium or contribution is non-deductible, but must be paid from the net income.
  • The benefits will not be taxed in box 1.
  • The value of the entitlement will be exempt from the tax on deemed investment income in box 3.
  • The net annuity—leaving aside the net premium—must comply with current annuity legislation. It must therefore provide for a retirement income.

The net annuity replaces the bill for the implementation of the pension and annuity top-up rules (Wet pensioenaanvullingsregelingen) which has been withdrawn.


Read an April 2014 report prepared by the KPMG member firm in the Netherlands: Net annuity for taxpayers whose pensionable income exceeds EUR 100,000




©2014 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now