EUROPE – Tax exemption of contributions and investment returns, or exempt-exempt tax (EET), at the European level would boost the development of second-pillar pension schemes, says the Comite Europeen des Assurances.
“The application of the principle of tax exemption of contributions and financial returns on investments, and taxation of pension benefits (exempt-exempt tax) at European level for all Member States, would encourage equal treatment between all beneficiaries and operators, thus contributing to the favorable development of second-pillar schemes and to the economy in general,” says the CEA, the European insurance body.
The CEA, which says it is “striving to eliminate barriers” in transferable pension rights, said European standards in such rights should have certain attributes.
It said that the standards should facilitate the acquisition of pension rights, protect acquired rights in revaluing so they are inflation proof and simplify the transfer of acquired pension rights. They should also ensure appropriate information for beneficiaries about job mobility.
It says that European insurers “insist on the need to give equal treatment to national employees who benefit from second-pillar pension schemes and nationals of other Member States”.
“The latter should benefit in particular from the same tax treatment, identical both for contributions and benefits, to that of national employees,” it adds.
The adoption of such principles “would avoid distortion of competition and would eliminate to a large extent the tax obstacles and barriers which are currently preventing any cross-border activity by institutions for occupational retirement provision”.
The European Commission launched the second stage of its consultation with social partners on measures to improve the transferability of occupational pension rights on September 15.