IPC 2026: the individual pension commitment

The IPC is strictly reserved for company directors who are paid regularly by a company under Belgian law. This includes:

• managers of an SRL/BV paid at least monthly;
• directors of an SA/NV paid regularly (as opposed to one-off attendance fees);
• paid active partners of an SCS, SC or SNC;
• managing directors responsible for day-to-day management, under a mandate contract.

Excluded: self-employed people working as a sole proprietor without a company (who take out a POZ/CPTI instead), unpaid directors (attendance fees without a regularly paid mandate), and assisting spouses not covered by the social status.

IPC taxation works on two levels: the annual premium (company side) and the payout of the capital (director side, at 60).

Company side: immediate corporate income tax deduction

The IPC premium is a business expense that is 100% deductible from the company's taxable base, provided the 80% rule is respected. The applicable corporate income tax rate:

• 20% SME rate on the first €100,000 of taxable profit (subject to the SME conditions of the Companies Code);
• 25% standard rate above that or if the SME conditions are not met.

Director side: 10% on exit at 60

On payout, the capital built up is paid to you personally and is subject to:

• 10% flat-rate taxation (notional conversion annuity), provided it is paid at 60 while you continue working, or at the statutory age.
• NIHDI (INAMI/RIZIV) contribution of 3.55%
• Solidarity contribution of 0 to 2% depending on the total amount

That is a typical total charge of 13-15% on the capital, compared with the ~50% personal income tax that would have hit equivalent income. The difference more than pays for choosing the IPC, and it is precisely this difference that drives high-earning self-employed people to incorporate.

Back-service allows a director who takes out an IPC late to catch up retroactively on career years already worked (as an employee, self-employed person, or director not covered by an IPC).

In practice: the 80% rule is calculated on the total career (40 years), but the capital built up so far is lower than what the rule allows. Back-service fills the gap with one or more initial premiums, sometimes substantial (€50,000 to €200,000 in one go), fully deductible from corporate income tax in the year of payment.

It is a powerful optimisation lever for a director who discovers the IPC at 40-50 and has cash in the company. The calculation must strictly respect the 80% rule.

1. Taking out an IPC without a PLCI/VAPZ first. You waste the greater leverage of the PLCI/VAPZ (outside the 80% rule) in favour of a constrained IPC. The PLCI/VAPZ always comes first.
2. Not paying yourself regular remuneration. If you pay yourself only in dividends (or irregularly), the tax authorities may reclassify the IPC premium: loss of deductibility, or even reclassification as a benefit in kind.
3. Calculating the 80% rule roughly. Even a modest overshoot can make the premium partly or wholly non-deductible. Have it recalculated every year by your broker or accountant.
4. Going 100% Branch 21 at 35. You leave 50 to 100% of final capital on the table over 30 years. Branch 23 (or a mix) is almost always better until 50.
5. Forgetting back-service. If you have 15 years of previous career not covered, you sometimes leave €100,000 of deductible premium unused. Always look at this when you sign up.