EURBS (European Union Retirement Benefits Scheme)

EURBS (European Union Retirement Benefits Scheme)

EURBS stands for the European Union Retirement Benefits Scheme. This is an overseas pension scheme into which certain EU pension rights can be transferred. The Schengen agreement of 1985 allows free movement of goods, persons, services and capital. As such, if you are from an EU member country and working in another country, you may be able to transfer your pension into an EURBS to mitigate tax. EURBS is a type of QROPS pension transfer for Europeans.

EURBS
EURBS European Union Retirement Benefits Scheme

An EURBS pension scheme is a suitable tax efficient solution for people who have left or are leaving the EU country in which they have built up pension rights.

EURBS offer flexibility, tax efficiency, freedom of investment advantages as well as being able to pass the entire sum onto named beneficiaries upon death.

The free movement of persons is a fundamental right guaranteed to European Union (EU) citizens by the Treaties.

EURBS. Which country would I transfer my pension to?

At the moment, Malta is a popular jurisdiction as it has low taxes and has more than 57 Double Taxation Treaties with other countries (DTA’s). Here is the current list for 2011:

Albania
Australia
Austria
Barbados
Belgium
Bulgaria
Canada
China
Croatia
Cyprus
Czech Republic
Denmark
Egypt
Estonia
Finland
France
Georgia
Germany
Greece
Hungary
Iceland
India
Ireland
Isle of Man
Italy
Jersey
Jordan
Korea
Kuwait
Latvia
Lebanon
Libya
Lithuania
Luxembourg
Malaysia
Montenegro
Morocco
Netherlands
Norway
Pakistan
Poland
Portugal
Qatar
Romania
San Marino
Serbia
Singapore
Slovakia
Slovenia
South Africa
Spain
Sweden
Syria
Thailand
Tunisia
Turkey
United Arab Emirates
United Kingdom
USA

What tax would I pay on my pension held in an EURBS or QROPS?

A pension would receive only a 15% tax rate (2011) if you are not domiciled (born) in Malta or a Maltese resident. So, you could move your pension into an EURBS in Malta, but work in another country in the EU or abroad.

EURBS example

A Dutch guy moves overseas to Switzerland. In most Dutch schemes when the last remaining partner dies, all monies within your pension fund are lost as they are retained by the fund. By transferring to an EU-approved scheme you will be able to pass on the assets to whomever you designate as the beneficiaries which protects your family. You also may reduce your income tax liability.

Which pensions can be moved into EURBS?

Can French and German pensions be transferred?

Unfortunately, only Pillar 2 and 3 pensions can be transferred into an EURBS/QROPS. Neither France nor Germany have any great history of Pillar 3 and in most instances, the pension scheme is a company and/or state one and the company or provider will not allow any transfers.

We have found cases in other EU/EEA countries where a company pension scheme is a mixture if Pillar 1 and 2 it can be possible to transfer/withdraw the Pillar 2 part of the scheme.

Irish and Dutch pension schemes are the most common transfers for EURBS/QROPS.

If you are a Dutch or Irish company or individual and want to avoid taxes in the Netherlands, please contact us at info@qropsspecialists.com

Advantages of EURBS/QROPS

The benefits of an EURBS (European Union Retirement Benefits Scheme):

  • Freedom of investment choice. Wider range of investments available
  • All your pensions can be transferred to one easily manageable place
  • Income tax savings
  • Tax savings on death. Reduction of inheritance tax (IHT)
  • Entire lump sum passed on to named beneficiaries upon death
  • Freedom of currency choice
  • Increase lump sum available
  • Increased income in drawdown available

There are several requirements that must be met in order for any transfer of your European pension funds can be considered. You will usually need to be in current employment in your county of residence and will need to provide a copy of your employment contract.

QROPS Specialists will then complete the required forms and submit them to the relevant Tax Authorities in your home country for confirmation that the transfer can take place.

Furthermore, certain criteria have to be met each year for the first 10 years after your pension fund has been transferred out.

These include a reporting requirement to the Tax Authorities of any payments made during this time and advising them if the pension funds are for some reason transferred to another scheme. This will be undertaken by the EURBS trustees. You don’t have to do anything.

Also during the first 10 years no “lump sum” can be taken from the Plan.

N.B. Any investment made within your QROPS/EU-approved scheme may be subject to market fluctuations and you may be subject to any changes in taxation rules.

For further information on EURBS as well as a free guide and advice, please contact info@qropsspecialists.com

EURBS article by QROPS Specialists.

2 Comments

  • I would like more information on EURBS, in particular as an irish resident, intending to retire in Ireland, what are my options for my Irish Pension fund.

    • Hi Anne,

      It depends very much on your situation, where you would like to retire, the size and type of your fund. I have sent you some more info privately.

      Best regards,

      Richard

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