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Pan-European pension funds: a problem solved

AmCham Belgium is pleased that the Minister of Finance, Johan Van Overtveldt, endorsed our recommendations to address the unintended fiscal consequences of the Belgian Pan-European pension fund regulation for non-residents and thereby make Belgium a location of choice for such Pan European pension funds.

Earlier this year, members of AmCham Belgium flagged an issue regarding Pan-European Pension funds in a letter to the Cabinet of the Minister of Finance. A regulatory inadequacy was deterring international companies from housing their European pension schemes in Belgium, even though Belgium has been a pioneer in centralizing pension management.

For every pension fund set up in Belgium, Belgian withholding tax is currently debited from the pension payments of all beneficiaries – even those who are not residing in Belgium and have never even worked in the country. Although tax exemptions exist through treaties aimed at avoiding double taxation, obtaining such exemptions entails a complex administrative burden for companies and retirees.

The Council of Ministers recently adopted a measure to counter this problem. As of January 1st, 2017, pensions paid to non-resident beneficiaries who have not been employed in Belgium and have not received tax benefits for pension savings in Belgium will benefit from an automatic withholding tax exemption.

AmCham Belgium is pleased to have contributed to a successful resolution of this issue in close collaboration with international business and public authorities. The Chamber looks forward to further improve the international business environment in Belgium and hopefully attract many such Pan European pension funds to Belgium.

See the press release of the Cabinet of the Minister of Finance here