United Tax Network – The smarter choice

United Tax Network – The Smarter Choice

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Belgium – Belgian expatriates and taxation of old age pension accrued in the Netherlands

Residents from Belgium who have worked in the Netherlands usually also accrued supplementary pension benefits in the Netherlands.

In accordance with the double tax convention concluded between Belgium and the Netherlands, such pensions benefits are in principle taxable in the State of residence. The Dutch supplementary pensions of Belgian workers have therefore been taxed in Belgium.

At the end of 2017, the Dutch authorities indicated that the pension benefits would also be taxed in the Netherlands. The Netherlands relied for this on a few court decisions whereby it was decided that the supplementary pension of frontier workers in some cases would not be taxable in Belgium.

The consequence of the sudden change from the Dutch authorities was that the supplementary pensions of frontier workers were taxed in both countries.

Intense consultation between both tax authorities has now led to an agreement based on which the Netherlands decided to waive the Dutch taxation of these supplementary pensions if the Belgian authorities demonstrates that these pensions have been or will be taxed in Belgium. If supplementary pensions are not taxed in Belgium, then these will be taxed in the Netherlands. This avoids double taxation but also double non-taxation.

With regard to the above, no action is required by the taxpayers as the tax authorities will provide each other with the necessary information to resolve this issue.

This agreement between Belgium and the Netherlands on this subject will be signed on March 5, 2018 by the Dutch State Secretary for Finance and the Minister of Finance.