Sabbatical, early retirement and still Life course credit Balance? Read more here

Until the 1st of January 2012 you can save money for leave through the Life course credit balance. If you weren’t a participant of the Life course credit balance on the 1st of January 2012, you cannot use this scheme any more. If you did participate on the 1st of January 2012, the scheme has been adjusted for you.

Life course credit balance €3000 or higher

Was your Life course credit balance €3.000 or higher? Than you can continue to save to the maximum amount until the 31st of December 2021. For you the following applies:

-You build up Life course life course leave tax credit over your amount until 2011.

-You can spend your life course credit balance on any plan you wish until the 31st of December 2021.

-Are you going to withdraw the entire amount in saved money in one time in 2015? Then the one paying your Life course credit balance will withhold income taxes over:

*80% of the Life course credit that you have built up before the 31st of December 2011

*100% of the Life course credit that you have built up after the 31st of December 2011

- Are you going to withdraw the saved amount in parts? Then the one paying your Life course credit balance will withhold income taxes over:

*100% over the amount you withdraw before the last withdrawal

*80% over the last withdrawal of your Life course credit balance

Life course credit balance lower than €3.000

In this case you cannot continue saving for the life course scheme. Your entire amount is released on the 1st of January 2015.

You will need to pay the following taxes over this amount in 2015:

                *80% of the Life course credit balance that you have built up until the 31st of December 2011      *100% of the life course credit balance you have built up in 2012

For each year you have saved until 2011, you will receive €207 in Life course leave tax credit. The one paying your Life course credit balance will settle this credit on the moment that he withholds taxes.

Withheld payroll tax

The one paying your Life course credit balance, has withheld payroll tax when paying your credit. The paid credit and the taxes are processed in your annual statement. When you are doing your tax return, you fill in this information on your tax return (box 1: income from work and living). Depending on your age you submit this as either wage or pension. With ‘Tax Exemptions’ you submit the Life course leave tax credit which you are entitled to.

Payroll tax not withheld

The one paying your Life course credit balance has not withheld payroll tax. You are still obligated to pay payroll taxes however. You will need to file your income tax declaration. You submit the paid Life course credit balance separately on your declaration (box 1: income from work and living). Depending on your age you file this as wages or pension. With ‘Tax Exemptions’ you submit the Life course tax credit which you are entitled to. Are you younger than 61 years old? Then you submit your paid Life course credit balance as pension.

If you have any other questions about the consequences of receiving your Life course tax credit? Please do not hesitate to contact us.

Source

Article of the FD

Tax Authorities