Are benefits from a supplementary pension scheme taxable?

Benefits paid under a supplementary pension scheme set up by an employer are not taxable in Luxembourg, regardless of whether the beneficiary is a resident or non-resident.

• Resident taxpayer: they have no tax obligations to fulfil, as the benefits (life annuity or lump sum) are fully tax-exempt. This exemption is due to the fact that the contributions have already been taxed at a flat rate of 20% upon entry.

• Non-resident taxpayers: they are not taxable in Luxembourg on these benefits. However, these amounts are in principle taxable in their country of residence.

Updated on: 09/01/2026