The new IPS account was launched on 1 November and made available to all account operators. The IPS account is in fact a regular VPS account, but it will be tagged to ensure correct tax reporting. The account may be opened by the account operators directly in VPS Investor Services (VPS IS) or via our ISO 20022 interface. In addition, VPS will provide functionality to prevent incorrect contributions and payouts from the account.
In January 2018, the new Tax Reporting Module will be completed. Centevo AB, the new VPS subsidiary, will be responsible for the IPS tax reporting, for those customers who have selected the tax reporting service. Centevo AB will also provide services for the pension payouts, but this is only expected to be completed in Q4 2018.
So far, it has been opened over 1,600 IPS accounts in VPS. We believe that even more IPS accounts will be opened during 2018 as the service gradually will be available in the self-service platforms.
The new IPS scheme allows investors to save up to NOK 40,000 a year. With the current tax rate of 24 per cent, the investors may be eligible to a general tax reduction of NOK 9,600 for the year 2017. When the pension funds are paid out, they will be taxed as ordinary income. Calculating with the 2017 tax rates, taxation of payouts may be reduced from up to 43.6 per cent till 24 per cent. The tax rate may, however, change from one tax year to another.