Different Pension Tax Schemes Across OECD Countries

On 30 October 2025, a review described how pension taxation is applied in the 38 OECD member countries. The article identifies three taxation points: pension contributions, capital gains generated by pension funds, and pension withdrawals. It includes policy examples from Iceland, Hungary and Estonia.

Many jurisdictions follow the EET (exempt‑exempt‑taxed) model, which exempts contributions and investment returns from tax and taxes only the pension payout. In contrast, the TTE (taxed‑taxed‑exempt) model taxes contributions and gains but exempts the payout. For instance, Iceland’s EET system allows a deduction of up to 4 % of wages for employee contributions and tax‑free withdrawals up to ISK 750,000 per year for married couples.

Understanding these models is crucial for taxpayers and employers planning retirement savings, as they affect tax burdens and investment choices. Different rules also influence the attractiveness of voluntary pension schemes in each country. The information enables readers to assess international pension tax implications more accurately.