Double taxation of pensions - expert accuses: "Many have overpaid 1,000 euros per year"

The Mannheim tax advisor Heinrich Braun believes that pensioners pay too much taxes - and has set off an avalanche.

Now the Federal Fiscal Court has to decide.

Munich - The Federal Fiscal Court in Munich is negotiating on Wednesday (May 18) two proceedings that could have far-reaching consequences for tens of thousands of pensioners and for the German tax authorities.

Depending on the outcome, the federal budget is threatened with billions of euros due to the possible double taxation of pensions and the sheer number of objections.

Merkur.de

spoke to the Mannheim tax advisor Heinrich Braun about his calculations, secret instructions from the authorities and what affected pensioners can do now.

Mr. Braun, you started the process of possible double taxation of pensions in the first place.

The proceedings will be negotiated in front of the Federal Fiscal Court on Wednesday.

What is it actually about?

There are several judicial proceedings over pension taxation.

These proceedings concern the taxation of statutory pensions and the pension funds of freelancers such as doctors, lawyers, pharmacists or architects and Rürup pensions.

Part of the payments into these coffers came from taxed funds and is taxed again when the money is paid out.

In our opinion, this is unconstitutional double taxation.

Which age groups would be affected by a possible double taxation of pensions?

There was a system change in 2005, the so-called Retirement Income Act in the Schröder government.

All age groups of pensioners who have retired since then have to cope with a more or less large double burden.

That depends on the amount of the pension and other income of the pensioner.

According to your estimates, what reimbursement claim could pensioners claim on average?

Let's take an example: A corner pensioner has received the average wage for 45 years.

This means that his monthly pension is around EUR 1,538 per month or around EUR 18,462 per year.

When he retires in 2020, 20 percent will be tax-free.

But 42 percent had already been taxed, so that 22 percent will be taxed again, i.e. around.

4,062 euros.

Even if the pensioner has no other sources of income, more than 25 percent tax is due on this amount, so he pays more than 1,000 euros too much - every year.

Measured against over 20 million retirees, that would mean over 20 billion euros. 

+

Double taxation of pensions: According to experts, the state collects double taxation on retirement benefits in some cases.

Now the BFH decides.

© Heinrich Braun

However, the taxpayers' association is dampening expectations.

Then, on average, should it be about reimbursement claims in the low three-digit range per person affected?

We do not know the calculations of the taxpayers' association.

In general, it can be assumed that pensioners have opened up additional sources of income, i.e. more likely to pay up to 1,600 euros a year too much, so that a pensioner will be asked to pay too much by the state with 30,000 euros until his death.

It can be assumed that men have a life expectancy of another 18 years when they retire, women live an average of 3.5 years longer.

Should the five judges of the Xth Senate agree with the plaintiffs: What consequences would such a judgment have for the federal budget?

For the federal budget, the consequences depend on how many retirees actually defend themselves with an objection.

Many saw that.

In a secret instruction last year, the Federal Ministry of Finance therefore developed a tactic to push pensioners out of the proceedings through psychological pressure.

Anyone who cannot present their notices from 40 years, and who cannot calculate tax, should waive their rights.

What do you recommend to pensioners with a view to filing a tax return with the tax office?

It is crucial that the annual tax assessment is challenged with the objection and suspension of the proceedings.

Can retirees still join the lawsuit?

There are no class actions as in civil law, so you cannot join.

Hardly anyone can take the hard legal path because financial legal protection is weak but expensive.

However, it is sufficient to file an objection and refer to pending proceedings, for example at the Saarland Finance Court, file number 3 K 1072/20. 

In the event of a corresponding BFH ruling, will the tax offices automatically transfer the corresponding amount back?

Unfortunately, no.

Anyone who did not defend himself early enough will get away with nothing.

If Finance Minister Olaf Scholz has his way, the pensioners have finally suffered.

The SPD with the Greens terminated the solidarity pact on this point after the employers granted a 50 percent tax-free subsidy.

Now the 40 million employees are supposed to pay taxes on it.

The repair of the botched Rürup reform, which can be traced back to the Schröder government, would be unclear even in the event of a positive judgment.

Therefore, the parties are asked to deliver a proper repair.

The opposition parties, especially the FDP, have made demands on this.

For example, the FDP MP Markus Herbrand wants to impose the burden of proof of double taxation on the authorities.