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Many retirees fear being taxed twice over
Photo:
Z1006 Matthias Hiekel / dpa
The upcoming ruling by the Federal Fiscal Court on the taxation of pensions will probably burden the tax authorities far less than initially feared.
According to information from SPIEGEL, the Federal Ministry of Finance, headed by department head Olaf Scholz (SPD), expects tax revenues of one to two billion euros annually from 2025, around half of which the federal government will have to cope with.
The loss of income occurs because the government should avoid any double taxation of pension payments in the future, according to the judges' stipulations.
This occurs when the tax-exempt portions of the retirement benefit are lower than the contributions that pensioners previously had to make from taxed contributions.
In order to avoid a double burden, the federal government had introduced special allowances for pensioners for a transitional period until 2040.
However, these could be too low for some employment histories, so that there is double taxation.
Those affected had complained against this.
However, the Treasury Department does not expect to have to issue tax refunds for the past.
So far, the allowances have been sufficient.
There are now 142,000 objections by retirees to notices from the tax offices on suspicion of double taxation.
The around 4.2 million retirees who live only or mainly on pension paid a good 2.2 billion euros in income tax in 2017.
More recent figures are not yet available.
The Federal Fiscal Court wants to announce its verdict next Monday.
rei
