Revenue share
The income portion is the income taxable portion of an annuity . The amount of the taxable portion depends on the age of the pensioner at the start of the pension and on the type of pension. The proportion of income is regulated in Section 22 of the Income Tax Act (EStG) , which regulates other income . The income component is the (annualized) interest income that results from an investment while the pension is being drawn.
Life and pension insurance (annuities)
Contributions to a capital-forming life insurance policy or to a pension insurance scheme are (partially) made from taxed income, so that the resulting pension benefits are not taxed again. In addition to a capital repayment, pension payments that are subject to a share of income are also made from an interest component. In principle, the interest component of the pension, referred to as the income component, is taxable. When determining it, it is taken into account that the health insurance subsidy included in the pension is tax-free.
The proportion of income from conventional private life / pension insurance (outside of the so-called basic pension) depends on the age at the start of retirement. The Income Tax Implementation Ordinance stipulates that the assessment basis of the earnings share of a private pension at the start of retirement since 2005, for example for a 65-year-old, is based on 18% of the total pension. This is a relief to the extent that before 2005 the proportion of earnings was 27%. The income share remains constant for the further duration of the pension payment.
The income portion of the pension is then subject to the personal tax rate. Example: With a monthly pension of EUR 1,000, an income share of 18% and an assumed personal tax rate of 30%, EUR 54 income tax is due on the pension (EUR 1,000 × 18% × 30%).
In return, there is no tax subsidy in the savings phase, so unlike, for example, the statutory pension or the Rürup pension , the contributions are not deductible from taxable income as special expenses.
Statutory pension and Rürup pension
The state pension until 2004 only the profit share as a type of income taken into account. The Federal Constitutional Court demanded equal tax treatment of pensions and pensions, which is why from 2005 pension taxation was put on a new basis. As part of the necessary conversion of pension taxation to downstream taxation , the taxable part of the statutory pension increases annually until the pension is fully taxable in 2040 (so-called cohort taxation). In return, higher and higher parts of the pension contributions are exempted from tax through the special expenditure deduction.
This procedure concerns pensions and other benefits from the statutory pension insurance, the agricultural retirement funds , the professional pension institutions and the basic pension products, also known as the Rürup pension .
Riester pension and company pension scheme
Contributions to occupational pension schemes in relief funds called donations can be claimed as tax under maximum amounts regularly fully benefit. In return, the pension payments are fully taxable, unless unsubsidized payments have been made in the pension plan:
Services that are based on subsidized contributions (including income and increases in value) are fully taxable in the disbursement phase as part of the income tax assessment (according to Section 22 No. 5 Sentence 1 EStG). In the case of pension payments that are based on unsubsidized contributions and the income and increases in value they contain, the income share is taxed (according to Section 22 No. 1 Clause 3 lit. a lit. bb EStG).
In the case of a capital payment based on unsubsidized contributions, only the income contained is taxable (in the context of further requirements, half if necessary), provided that this would be subject to taxation as capital income according to the general provisions.
Effect of generalization
The income share is basically determined as the difference between the assets saved at the time of the start of the pension and the present value (present value) of all expected pensions (which from the beginning contain the income from the initial assets, which slowly decrease over the term of the pension).
Example: Someone saves € 100 per month for 35 years at 8% interest on an insurance policy and receives around € 230,000 at the end of the term, of which they have paid in € 42,000 themselves. The accumulated income therefore corresponds to € 230,000 - € 42,000 = € 188,000. This income is tax-free (if the insurance started before 2005). If the € 230,000 at age 65 will now be converted into an initial pension of z. If, for example, € 1000 is converted per month, 18% of this, i.e. € 180, is taxable at the personal tax rate. The 18% represent the expected future income gained from the slowly melting capital and converted into annuity.
Pensions from Riester and Rürup contracts are already taxed downstream today (Riester) or from 2040 (Rürup). In contrast to this, state-sponsored annuity insurance is only taxed with the income share. In the overall tax perspective (entitlement and benefit phase), state-subsidized provision does not necessarily have to prove more profitable than unsupported provision; This is particularly the case if the taxation in old age (after retirement) is significantly higher than the total savings (tax savings and subsidies) on the previous savings installments. If the tax rate in old age and the funding rate (this also includes the tax savings) of the savings rates are identical, there are arithmetically tax-free income.
Web links
- § 22 EStG with the table of the percentages of the income share
