Luxembourg encourages voluntary pension savings (3rd pillar) to complement the public pension system.
However, unlike many EU countries, these savings are taxed when paid out, which reduces their long-term effectiveness.
In practice:
• Several EU countries apply partial exemptions at maturity
• Others tax contributions rather than payouts
• Most aim for long-term predictability over 30–40 years
A public petition is currently addressing this specific tax treatment, arguing that it discourages participation in voluntary retirement savings.
Source / details:
—
no_options_lux
1 comment
My only issue with the prevoyance vielleisse schemes are the investment limits
It would be beneficial if they’d change the rules for the first point by e.g. creating something like investment savings accounts.
Obviously it seems somewhat fair that one gets taxed if you get tax benefits when paying into the scheme. Maybe a lower flat tax would make sense
That being said, I’d be much more at ease if they provide long term visibility when it comes to capital gains exemptions (can be limited to a maximum amount) so to provide stability for those setting cash aside