Revision Interest (Revisierente)
Revision interest (revisierente) is a 20% penalty charged by the Tax Authority when you withdraw a tax-facilitated pension or annuity product early or when the conditions are violated. The purpose is to reclaim the tax benefit you previously enjoyed through deduction of premiums or contributions. Revision interest comes on top of the regular income tax you pay on the withdrawal. Suppose you withdraw €50,000 from your annuity: you then pay up to 49.50% income tax plus 20% revision interest on the value. This makes early withdrawal extremely costly. There are exceptions, for example in cases of long-term disability.
Example
You've built up €80,000 in an annuity policy and decide to surrender it early. You pay 36.97% income tax (€29,576) plus 20% revision interest (€16,000). In total this costs you €45,576 – more than half the amount goes to the tax authorities.
Why does this matter?
Revision interest makes early withdrawal of pension or annuity products very unattractive. Considering withdrawing your pension or annuity funds early? Get proper <a href="/en/tax-advice">advice</a> first about the tax consequences.
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