NETHERLANDS - The tax treatment of company employees and the self-employed in the Netherlands should be equalised when it comes to pension saving, in both the accrual stage and the benefits stage, a committee of fiscal experts has concluded.

In a publication of the Association for Tax Science, the committee argued that because the intent and goal of a pension and annuities is the same, workers and entrepreneurs should be entitled to the same fiscal framework in the second and third pillars.

In a blueprint for a new system, the experts suggested a single approach, in which a 10-step list determines the yearly margin for tax relief, with over 60s having a five times larger allowance than under 20s.

Gerrie Dietvorst, fiscal expert at Achmea and head of the CompetenceCentrum of Pension Research at Tilburg University, said: "The stack is based on the single premium needed to fill in the pension shortfall for each year, with younger workers needing a lower premium."

The experts said the margin that has not been used up in a single year should be rolled over indefinitely and include an additional 4% interest a year.

Their proposed set-up takes a yearly pension accrual of 2.25% into account and is average salary-based, as approximately 80% of Dutch workers participate in such arrangements in the second pillar, they explained.

The committee suggested taking the pension contribution as criterion, as it is "labour-neutral, manageable in terms of budget and can be quickly and properly implemented".

In the opinion of Dietvorst, the main advantage of an equal fiscal treatment of second and third-pillar arrangements is the large costs saving, in particular for the implementation at insurers and banks.

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