Pension taxation
The pension tax is governed by § 22 Income Tax Act (other income). To the Other income tax purposes include private pensions, in part, the supply systems of occupational pensions and public pensions. Private pensions are taxed with the income share (certain year- related percentage according to § 55 EStDV to § 22 EStG). With the Retirement Income Act, the taxation of pensions was changed with effect from 2005. The taxation of civil servants' pensions takes place according to § 19 EStG.
Reason for the change in pension taxation 2004/2005
On March 6, 2002, the Federal Constitutional Court ruled that the different tax treatment of civil servants' pensions and pensions from the statutory pension insurance violated the principle of equality in Article 3 (1) of the Basic Law and was therefore unconstitutional. The court therefore asked the legislature to re-regulate pension taxation in accordance with the constitution by January 1, 2005 at the latest.
The reasoning of the Federal Constitutional Court essentially came down to the fact that the employer's contributions to the pension insurance were not taxed, therefore the pension contained a portion of the income that had not been subject to taxation until then.
The expert commission that was set up, chaired by Bert Rürup, developed the reorganization of the tax treatment of pension expenses and pensions. The Retirement Income Act derived from this came into force on January 1, 2005. In the meantime, due to various changes in the law, important framework conditions, which were the basis of the recommendation of the Expert Commission, had changed.
criticism
The effects of the reform are criticized by experts, as they see an associated unconstitutional double taxation . Already in 2007 it was said in a confidential statement from Rische, at that time President of the BfA and Rürup, the then chairman of the commission, to the Federal Ministry of Finance and Federal Ministry of Social Affairs that the new taxation “on the basis of the current framework conditions to a considerable extent violates the prohibition of Double taxation violates ". The ARD business magazine Plusminus quoted in its reporting u. a. Franz Ruland , former managing director of the Association of German Pension Insurance Institutions . The parliamentary group DIE LINKE has u. a. to avoid double taxation introduced a resolution proposal in the Bundestag on May 16, 2019. Individual economists, on the other hand, criticize the factual view that these analyzes have omitted and the yardstick used to measure double taxation. With a systematic assessment, no double taxation problem would therefore be observed. The calculations of this study are based on the assumption of the Rürup Commission that contributions to statutory health and long-term care insurance paid in the retirement phase (and deductible as special expenses) are counted as part of the tax-free part of the pension. However, the same economists, together with other authors, also show in a further study that a departure from this assumption by the Rürup Commission would lead to clear double taxation being identified. At the same time, the research team shows that potential double taxation would be relatively easy to address if the EStG were adapted accordingly. In particular, individual proof of double taxation for every pensioner would then not be required.
Pension taxation until 2004
Until 2004, the so-called income component of the pension was subject to income tax. Depending on the age of the beneficiary at the start of retirement, a rate of around 27% to 35% of the pension payment was subject to income tax .
Disability pensions are abbreviated annuities. Up to and including 2004, taxation was carried out in accordance with Section 55 (2) EStDV with the corresponding income share. If the disability pension was converted into a retirement pension, the income share was to be applied according to Section 22 No. 1 Sentence 3 Letter a of the EStG old version.
Pension taxation from 2005
Pensions from the statutory pension insurance, Rürup pensions
For pensions from the statutory pension insurance , from agricultural retirement funds, from professional pension institutions and for pensions based on a private, funded life annuity insurance within the meaning of Section 10 (1) No. 2 EStG ( basic pension (Rürup)), the downstream taxation will be implemented gradually from 2005 . The taxable portion is no longer determined according to the age at retirement, but exclusively according to the year of retirement. This then applies for the entire period of pension payment. All pensions starting up to 2005 are taxed at 50%. The taxable pension component increases in steps of 2 percentage points from 50% in 2005 to 80% in 2020 and in steps of 1 percentage point from 2021 to 100% in 2040. The taxable pension portion is therefore 50% when retirement begins in 2005, 52% when retirement begins in 2006, etc. and finally 100% when retirement begins in 2040. Correspondingly, the deductibility of contributions to old-age provision increases as a special expense from 60% in 2005 by 2% to to 100% in 2025.
Pension adjustment amount
The tax-free pension component determined at the start of retirement is determined on the basis of the second pension year. Regular pension increases do not affect the tax-exempt part, so regular pension increases are fully taxable. If the amount of the pension changes due to special events (e.g. additional payments, introduction of the mother's pension, reduction in widow's pension due to other income), the tax-free portion must be recalculated. The tax-free portion changes in relation to the changed pension to the pension that was decisive for the initial determination of the tax-free portion. The sum of the regular pension increases up to the point of recalculation is the pension adjustment amount . This must be deducted from the amount of the changed pension when recalculating the tax-free pension component.
Other pensions
Retirement and compensation pensions, such as pensions from the employers' liability insurance association (accident pensions ) or pensions for war invalids , remain tax-free. Annuities from private pension insurance contracts that do not Riester are or basic pensions, as well as direct insurance according to § 40 b EStG subject continue to tax only the interest portion. Life annuities from sales transactions are also generally taxed with the income share. The proportion of earnings varies depending on the age at the start of retirement and is between 59% (age at the start of retirement 1 year) and 1% (age at the start of retirement 97 years).
Advertising expenses and allowances
As with other types of income, income-related expenses and allowances can also be claimed for pensions . The flat rate for advertising expenses is 102 euros per year. From the age of 65, there is an old-age relief , the maximum amount of which was 1900 euros in 2005 and 1140 euros in 2015; this allowance is to be reduced to 0 euros by 2040.
Pension receipt notifications
Since October 2009, the tax offices have received the data from 120 million pension notifications for review. This is legitimized by the new § 22a EStG. All pension providers (including insurance companies and pension funds) must submit pension receipt notifications to the tax office for each pension.
Sample calculation
In the following example, it is assumed that no other taxable income is generated in addition to the pension and the amount of the pension, the tax-free subsistence level and the other tax framework data (e.g. tax rate , solidarity surcharge, etc.) remain unchanged over the entire period of pension receipt. However, the retirement benefit has not been taken into account in this calculation.
- Gross pension € 15,686
- of which 50% tax-free (based on retirement in 2005) = € 7,843
- € 7,843 remain taxable
- less flat rate for advertising expenses of € 102
- remain income of 7,741 €
- less special expenses lump sum € 36
- Less pension costs € 1,286
- remain taxable € 6,419
- Tax = € 0, as the basic tax-free amount (for single persons : 9,000 - as of 2018) is not exceeded.
For an initial gross pension of € 15,584, on the other hand, the following values would result, also for retirement in 2005, with the respective basic tax-free amounts increasing from year to year:
| Year of entry | taxable portion |
to be taxed (calculation as above - as of 2012) |
Income tax |
Net annuity per year |
|---|---|---|---|---|
| 2005 | 50% | € 7,792 | 0 € | € 14,400 |
| 2006 | 52% | € 8,103 | 0 € | € 14,400 |
| 2007 | 54% | € 8,415 | 0 € | € 14,400 |
| 2008 | 56% | € 8,727 | 0 € | € 14,400 |
| 2009 | 58% | € 9,038 | 17 € | € 14,383 |
| 2010 | 60% | € 9,350 | 65 € | € 14,335 |
| ... | + 2% p. a. | € | € | € |
| 2015 | 70% | € 10,908 | 334 € | € 14,066 |
| ... | + 2% p. a. | € | € | € |
| 2020 | 80% | € 12,467 | € 647 | € 13,753 |
| ... | +1% p. a. | € | € | € |
| 2025 | 85% | € 13,246 | € 819 | € 13,581 |
| ... | +1% p. a. | € | € | € |
| 2030 | 90% | € 14,025 | € 1,009 | € 13,391 |
| ... | +1% p. a. | € | € | € |
| 2040 | 100% | € 15,584 | € 1,461 | € 12,939 |
Web links
- Federal Ministry of Finance: Taxation of retirement income . Updated November 2015, accessed February 2, 2017
- German pension insurance: pension taxation - you have to expect it . Retrieved February 2, 2017
- Stiftung Warentest: Pension taxation: This is how the tax office calculates . Retrieved February 2, 2017
Individual evidence
- ↑ § 55 Determination of the income from life annuities in special cases
- ↑ BVerfG, 2 BvL 17/99
- ↑ In future , the state will receive twice as much from many citizens , FAZ from March 19, 2016, accessed on June 6, 2019
- ^ No more double taxation of pensions , Wirtschaftswoche from June 1, 2016
- ↑ https://www.presseportal.de/pm/129256/4166734
- ↑ Simplifying pension taxation and avoiding double taxation , BTDrs 19/10282 of May 16, 2019, accessed on June 6, 2019
- ↑ Malte Chirvi, Ralf Maiterth: Double taxation in the transition to the subsequent taxation of statutory pensions? In: Tax and Economy . 2019, p. 130-143 .
- ↑ https://www.researchgate.net/publication/341509067_Zuordnung_von_Sondergabe_in_der_Rentenphase_als_Bestimmungsfaktor_fur_das_Voriegen_einer_Doppelbesteuer_beim_Ubergang_zur_nachgelagerten_Besteuer_gesetzlicher_Renten
- ↑ Welt Online: Tax returns: Tax offices will also check pensioners from October , August 2, 2009.
