Tax on benefit
Regardless of the reason for the benefit received, it is considered earned income and subject to withholding tax.
The amount of tax payable on earned income depends on the form of return payment chosen, the reason for the benefit received and the length of time the individual has contributed.
If the benefit is paid as income, all the payments received in the year are subject to taxation
If the benefit is paid as capital, then it is necessary to separate the benefit from contributions made up to the 31st of December 2006 from the benefit from contributions made as of that date. Benefit received from these latter contributions does not involve tax deductions. Benefit received from contributions made up until the 31st of December 2006 received in the form of capital is deducted as follows:
| Time as contributor |
Retirement |
Incapacity |
Death |
|
Up to 2 years |
Income 100% |
Income 60% |
Income 100% |
|
More than 2 years |
Income 60% |
Income 60% |
Income 60% |