Impact of the new divorce law on direct taxes - Part 1: The changes

In 2017, there were changes to divorce law. These primarily concern amendments relating to the division of pensions and retirement provisions. This has immediate effects on direct taxes. Findea explains in this first part of a two-part series of articles what these changes are.

The Changes

‍The changes in divorce law are intended primarily to achieve more flexibility. However, this regulation only applies to cases where adequate provision is ensured. To achieve this, pension entitlements will now be split even if one spouse is already receiving a pension at the initiation of the divorce proceedings. The old-age pension of the obligated spouse will henceforth be divided between both spouses. Thus, each of the divorced spouses now has their own right to an old-age benefit. This solves the issue of the “divorced widow”. If the obligated spouse dies before the entitled, the latter no longer loses their retirement benefit. In addition, when funds are transferred from one fund to another, it must now be specified which portion comes from the mandatory insurance. The date for determining financial circumstances is the initiation of the divorce proceedings.

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