An EIP is a life insurance contract that provides supplementary pension benefits to self-employed individuals through a company. The premiums are 100% tax-deductible and are paid by the company under Branch 21 and/or Branch 23, depending on the choice made by the company director.
EIP is often compared togroup insurance for employees. In both cases, these supplementary pension plans pay premiums via the company director/employer.
What is EIP insurance for self-employed workers?
An EIP allows self-employed individuals to generate significant capital for their retirement through their companies while being protected during their careers. This insurance allows for the inclusion of additional guarantees such as:
- guaranteed income: guaranteed income insurance covers your remuneration in the event of incapacity for work or illness (more info)
- premium waiver: your group insurance continues to pay for itself in the event of incapacity for work or illness
- death: protect your loved ones in the event of premature death
Taxation of Individual Pension Commitments (EIP)
Your EIP premiums are paid by your company and are fully tax deductible! What's more, this insurance for self-employed workers is an excellent way to receive deferred or immediate remuneration (see real estate investment below) with lower tax pressure than dividends or bonuses!
Taxation - How is the pension capital of an EIP taxed?
Each premium paid by your company is subject to a 4.4% tax, and the taxation of your capital accumulated in an EIP depends on your age at retirement. The table below illustrates the different capital tax rates based on your age.
Real estate investment for the self-employed
A EIP greatly facilitates real estate transactions in Belgium and throughout the European Economic Area (renovations, purchases, construction, etc.). You can either pledge your capital or request an advance on your accumulated reserves to finance your real estate projects. This allows you to directly benefit from part of the current and future capital of your individual pension commitment!
The EIP is also an excellent tool for obtaining a bullet loan: the bullet loan. The difference in cost between a traditional loan repaid from your net income and a bullet loan repaid from your EIP can be staggering!
All of the above advantages make individual pension commitments an undeniably useful financial tool in the salary package of self-employed business owners !
How do I subscribe to an EIP in Belgium?
The RGF Group, an independent organization specializing in pension planning, ensures that you optimize your EIP at various levels:
- Tax optimization/increased potential: Most business leaders believe they have reached the tax limits for their group insurance, and their accountants reinforce this belief. However, by reorganizing your salary package more effectively, unexpected opportunities often arise!
- Real estate project development: our expertise in this area ensures that you adopt the best strategy for financing a real estate transaction, from a tax, profitability, and protection perspective.
- Personal protection: we guarantee to provide optimal coverage for your income and the continuity of your pension plan in the event of incapacity for work.
- High returns: Finally, we always offer you the best returns on the market for your individual pension commitment.
