Income tax - How is income from a life insurance contract taxed?

The interest on your life insurance contracts is taxed in 2 stages.

1. When they are paid, they shall be subject to flat-rate levy without discharge of 12.8% (unless you are applying for an exemption based on your reference tax income).

2. Interest is recorded on your tax return for taxation by one of the following means:

• Flat rate of 12.8%
• Progressive Income Tax Schedule if you choose this option when you file your tax return

Any excess is returned to you.

The interest on your life insurance contracts is first taxed in 2 steps.

1. Earnings shall be subject on payment to a flat-rate levy without discharge of 7.5% (unless you are applying for an exemption based on your reference tax income).

2. You have to report these gains on your income tax return after deducting the abatement next:

• €4,600 for a single person
• €9,200 for a couple

The interest is then taxed at the following flat rates:

• 7.5% for interest corresponding to premiums not exceeding €150,000
• 12.8% for interest on premiums in excess of €150,000

However, you may be required to progressive scale of income tax if you choose this option when you file your tax return

Any excess is returned to you.

The interests of your life insurance contracts of under 8 years can be taxed in one of the following 2 ways:

• Or, at the time of their payment, at standard final levy of 15%, if you choose this option at the time of payment
• Or, at the time of processing your tax return, at the progressive scale of income tax, if you have not opted for the flat rate when paying interest

The interests of your life insurance contracts older than 8 years can be taxed in one of the following 2 ways:

• Or, at the time of their payment, at standard final levy of 7.5%, if you choose this option at the time of payment
• Or, at the time of processing your tax return, at the progressive scale of income tax, if you have not opted for the flat rate when paying interest