Pepping up PEPPs .

Dr. WSW – 03/2018

In June 2017, the European Commission published a proposal for a regulation on establishing a pan-European personal pension product (PEPP). Following the Council, it’s now the turn of the European Parliament to comment. 


On 23 February, a draft report on the tax treatment of PEPPs was submitted by Dutch MEP Sophia In 't Veld containing just one page of text; but that one page packs a punch. In 't Veld suggests no less than the European harmonisation of the tax treatment of PEPPs. As the European Union does not have competence in this area, the MEP proposes a multilateral tax agreement between the Member States. Low-income earners should be helped with specific state subsidies. She also recommends that PEPPs be given the same tax relief as national products, even if the European products do not meet all national requirements. 

A wolf in sheep’s clothing?

The MEP’s ambitious recommendations feed the suspicion that the proposed pan-European personal pension product could metamorphose over time into a wolf in sheep’s clothing. Not only would PEPPs oust national products, they would severely interfere with social and tax policy-making powers. This suspicion is all the more serious because the title of her report not only refers to the tax treatment of PEPPs but of all personal pension products in general.