TAX TREATMENTS OF PRIVATE PENSION PLANS

Abstract

Different tax incentives have been extensively used by the countries to support private pension plans. National tax authorities retain the discrete right to implement taxes to all the three transactions within the private pension accounts (the contribution payment, the investment revenue receipt and the pension account withdrawal), or eventually, choose more appropriate tax combinations. The purpose of this article is to evaluate the stimulative effects that arise from the present as well as the possible tax regimes of private pension plans. The comparative analysis clearly reveals the popularization trend among the countries of the so-called ‘tax-favoured pension schemes’, whose effects of taxation integrally create a positive incentives that support savings over consumption, and adequate growth of the private pension funds.