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Wednesday 26 November 2008

PCLI/VAPZ: which one to choose?

The end of the year is nearing, and it's time for me, and maybe all belgian starters, to take a look at what your income will be and optimise your fiscal situation.

First thing: if you have income higher than 11000€ for the year and you decided to pay the minimum social security contribution of 600€, you will have a regularisation, in the sense that you will have to pay you social contribution on your revenue above 11000€. The trick is that those social contributions are deductible from the revenue you have to put in your tax declaration. But for that to apply, you have to make the payment this year! (here's some more info: fr, nl).

If you started after 30 march, also note that this year is not full, you have only 3 quarters. It means that the definitive social contributions you will have to pay will be based on your revenue of next year. For the social contribution, you better make profit this year than next. But remember that more profit this year mean you'll pay more taxes too. So honestly, I'm not sure how this all combines. Any hint?

And finally, the subject of this post: as an ind├ępendant/zelfstandige you can subscribe to a additional retirement fund: FAPZ (in dutch)/PCLI (in french). You can contribute up to 8.17% of your revenue, with a maximum of 2686.05€ yearly. And it's 100% deductible from your revenue!

You'll see there is a social vapz/pcli, which includes a guaranteed revenue insurance, but it's not that interesting I've heard: the part of your payment going to the retirement fund is lower, as you pay your guaranteed revenue insurance of course.

Now my question: any advice on where I should take my vapz/pcli? Are there big differences between the providers? I'm currently at Acerta, which works with KBC. Any opinion on their offering?

Furthermore, any further advice on optimisation of revenue for independant workers?


Bert de Bruijn said...

if you work under a company (BVBA/SPRL, NV/SA, ...) there is the option of IPT/EIP. I find it difficult to see the forest through the trees...

Iggy said...

If you increase your social contributions this year, you will pay less taxes. But this doesn't give you any additional benefit: this year's income is not used as a reference later on.

Since you will not recuperate all of the extra payments you make, you will lose money. Wait until next year to increase your social contribution.

I have my VAPZ from my social security fund (Xerius). It gives a yield around the average for last year.

Comparing insurance funds is difficult. The companies don't usually publish the yield they made. Even if you do have the numbers, it doesn't show the whole picture: next year, the yields can be completely different.

The company pays for an IPT as well.

In that case, you have to consider both for the maximum deductible amount (the famous 80% rule). This calculation is complex. I mostly leave it up to the insurance company to do that.

If you don't have enough money to pay both, you should preferably pay the VAPZ: most IPT contracts allow for a "backservice" (i.e., making up for missed payments in previous years). For a VAPZ, this is not possible.

Anonymous said...

I am running my SPRLU for 8 years now.

What is in stock:

* PCLI full level
* EIP with backservice last year (35K in one shot, 4K yearly)
* Social security payments: 3K per 3 months
* Guaranteed revenue insurance

So, I do need to make more than 8K a month to cover all the costs at this time. Minimal mode: 5K

Car, mobile phone, PCs, Internet, Books etc all included.