Posted on 04 May 2022
Self-employed workers: How to get the right insurance and tax benefits?
Pension remains at the heart of the debate. Should you take out a pension plan? Or a pension plan with your employer? Are these contributions tax-deductible? First, you need to know the basics about pensions in Luxembourg.
First, you need to know the basics about pensions in Luxembourg.
In Luxembourg there are 3 pillars of pensions:
In Luxembourg there are 3 pillars of pensions:
- The compulsory pension, for which we pay social security contributions
- The supplementary pension plan set up by the employer. The contributions are tax deductible with a maximum of 1,200 euros per year and per taxpayer. This is known as the “Régime Complémentaire de Pension” (RCP).
- The pension plan, to build up a private pension, also called “Prévoyance vieillesse”. Contributions are also tax-deductible, up to a maximum of EUR 3,200 per year per taxpayer, i.e. EUR 6,400 for a couple taxed together.
In Luxembourg, there are several ways to build up a pension. For the self-employed, there are adapted solutions to meet their needs.
Indeed, for the self-employed, the pension plan through the employer (RCP) is impossible because they are self-employed and are therefore their own employer.
For them, there is the RCPI, the “Régime Complémentaire de Pension pour Indépendant” (Supplementary pension plan for the self-employed).
This plan is intended for:
- Entrepreneurs
- Liberal professions
- Managers of SMEs
- Self-employed individuals
Like the RCP for employees, the RCPI is tax-deductible. This time, the limit is not 1,200 euros per year but 20% of the annual income, which makes it a fiscally interesting investment.
