Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/128421 
Year of Publication: 
2016
Series/Report no.: 
CESifo Working Paper No. 5715
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
There is a rising share of individuals spending at least some part of their working life abroad and acquiring pension rights. While the portability of pensions and other social benefits has received some analytical attention over the recent decade there is currently limited analytical guidance on the taxation of retirement provisions within a country, and there is virtually none for the taxation of internationally portable pensions. For both national and international taxation of pensions, the actual taxation approaches are characterized by a high level of diversity, complexity and inconsistency within and across countries that risk harming labor mobility and creating fiscal unfairness. The proposed taxation approach for internationally portable pensions mixes notional front-loaded taxation (as the tax due on contributions/savings is deferred) with actual back-loaded taxation as the taxes are due when the benefits are disbursed (in source or residency country) or when accumulated savings effectively leave the country. This approach promises to establish broadly neutrality for international labor mobility decisions, fiscal fairness of tax revenue around retirement provisions between source and residency country, and bureaucratic efficiency, including a consistency with EU regulations and most double-taxation treaties.
Subjects: 
income taxation
cross-border labor mobility
portable pensions
double taxation treaties
EET
TEE
individual and fiscal fairness
bureaucratic effectiveness
JEL: 
H20
H24
H55
Document Type: 
Working Paper
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