International mobility continues to increase, yet pensions do
not seem to be a big concern. Employees typically continue to
contribute to their state pension (social security) and
occupational (company) pension where possible, but how are pensions
taxed in different countries and why does double taxation often
occur? This article covers the international tax challenges of
occupational pensions.
How are occupational pensions taxed?
Where occupational pension plans meet certain conditions under
the country's tax rules, favourable taxation is often
available. These conditions typically relate to the pensionable
base, the retirement age and the maximum contribution rate.
When discussing the taxation of pensions, it is good to
distinguish three parts: (1) contributions to the pension plan, (2)
returns on investment, and (3) distribution of pension benefits.
Favourable tax treatment can mean tax-free employer contributions,
tax-deductible employee contributions,
