On February 8th, 2018 the Belgian House of Representatives approved the legislation on the basis of which self-employed persons without a (management) company will be able to accrue a second pillar pension. The new system is inspired by the existing second pillar system available for employees and self-employed persons conducting their activity through a company. The legislator aims to end the discrimination between self-employed persons with and without a company.

Up until now, self-employed workers without a company are limited in their means of accruing a pension on top of their statutory pension (first pillar): the only tax friendly options for doing so are the supplementary pension for self-employed (VAPZ/PCLI) (first/second pillar) and a regular pension saving plan (third pillar). Both are limited in terms of the amounts which can be saved while benefitting from tax relief. Due to this new legislation they will (soon) be able to accrue pension savings through the second pillar system as well, with a similar beneficial tax treatment.

This new pension system has characteristics of both the second and third pillar.

The key elements of the system are:

  • The contributions will benefit from a 30% tax relief.
  • The so-called 80%-limit must be observed (based on an average income of the last three years of activity).
  • A back service is possible under strict conditions, but only for years of activity as from the entry-into-force of the act.
  • A premium tax of 4,4% is levied.
  • The pension capital is subject to the following withholdings:
    • A contribution of 3,55% (RIZIV contribution) and a solidarity contribution up to 2%
    • The pension capital is taxed at 10%.

Due to the social provisions which are still to be implemented, the new pension scheme can only be applied three months after the publication of the act.