WRITTEN QUESTION E-0611/02 by Geoffrey Van Orden (PPE-DE) to the Commission. Taxation of State pensions in the 15 Member States of the EU.
Date: 2002-03-05
Institutions: European Parliament, Provisional data
Subjects: EU Member State, pension scheme, tax on income, tax system

14.11.2002

EN

Official Journal of the European Communities

C 277 E/65

In 2002 ECHO,

in co-operation with United Nations International Children’s
intervention strategies).
intends to improve the availability of data on children affected by armed
Emergency Fund (Unicef),
conflicts (systemised data base). As for advocacy, ECHO produced brochures,
funded photographic
exhibitions and jointly organised with VOICE and Save the Children, the Conference on the plight of child
soldiers in Brussels in October 2001.

Under the European Initiative for Democracy and Human Rights (Chapter B7-7) for 2000, substantial
support was provided for a two-year project undertaken by Unicef in Sierra Leone regarding protection
and reintegration of children associated with the fighting forces and other children separated from their
families as a result of the conflict. Furthermore in 2001, an additional € 719 932 was designated to social
reintegration of child ex-combatant also in Sierra Leone.

These efforts form an integral part of the promotion and protection of human rights within humanitarian
operations as well as in linking relief, rehabilitation and development.

(2002/C 277 E/069)

WRITTEN QUESTION E-0611/02

by Geoffrey Van Orden (PPE-DE) to the Commission

(5 March 2002)

Subject: Taxation of State pensions in the 15 Member States of the EU

Are State pensions taxed in each of the 15 Member States of the European Union?

In Member States where State pensions are taxed, what is the rate of taxation levied?

Answer given by Mr Bolkestein on behalf of the Commission

(11 April 2002)

The Commission has understood that state pensions refer to benefits from so-called ‘first-pillar’ old-age
pensions, which are usually financed on the ‘Pay-as-you-go’ principle. The benefits from such state
pensions are in principle liable to personal income taxation in each of the Member States. They are treated
as labour income in most cases. However, most Member States tax such benefits more favourably than
income from other sources, either by way of increased tax allowances or additional tax credits that are age-
based, or by way of partial exemption of taxable income from the personal income tax. Moreover, Member
States generally do not levy social security contributions on pensions, although some Member States may
levy such charges for health insurance or at lower general rates for pensioners than for people of working
age. Together, these measures = and the effect of the system of progression of the statutory marginal
income tax rates = imply that the direct tax burden faced by retired people receiving State pensions is
generally lower than that carried by people of working age. The effect of such measures is that the
difference between net incomes of pensioners and people in employment will be significantly smaller than
the difference in gross incomes.

However, it should be pointed out that usually the effective rate of taxation levied on persons with State
pension benefits depends not only on the amount of the state pension benefits, but also (often crucially) on
the amount of other taxable incomes (for example, supplementary pension benefits, rents, other income
from savings). Furthermore, the tax and social security contribution burden on pensioners tends to reflect
the generosity of state pension benefits and thus the ability to pay of pensioners. Annex 1 provides an
overview of the tax treatment of State pension benefits in the Member States. This annexe is sent direct to
the Honourable Member and to the general Secretariat of the Parliament.