The legislator encourages you to take out a private pension scheme contract by offering tax benefits, subject to certain regulatory constraints that include the following, in particular:
- you must be an individual taxpayer resident in Luxembourg, or equivalent,
- you must be under 65 years old,
- you must take out a policy for a minimum term of 10 years,
- the minimum age at which you may redeem the policy is 60 years and the maximum is 75 years of age,
- the maximum annual amount deductible per individual taxpayer: EUR 3.200.
When the policy matures, you can choose between:
- a lump-sum payment of all the capital accumulated,
- payment in the form of a lump sum for up to 50% of the capital accumulated and the remainder in the form of a monthly annuity,
- payment of all the capital accumulated in the form of an annuity.
Take advantage of all tax benefits by filing your tax return with myTax, your digital fiscal assistant by VIREO on S-Net Desktop.
● Repayment in the form of a lump sum is taxed at half the total rate, as the total rate is your average tax rate.
● Half of your monthly annuity is exempt from taxation.