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Double taxation of pensions: German top finance judges make it exciting

2021-05-25T23:40:33.951Z


Do the tax authorities collect double payments from pensioners? The Federal Fiscal Court has to decide on this. At the start of negotiations on Wednesday, the judges did not allow themselves to be looked at.


Do the tax authorities collect double payments from pensioners?

The Federal Fiscal Court has to decide on this.

At the start of negotiations on Wednesday, the judges did not allow themselves to be looked at.

Munich - In the legal dispute over a possible double taxation * of pensions, the Federal Fiscal Court (BFH) did not show any trend on Wednesday.

Both procedures are essentially about the question of whether the tax authorities will collect too much tax in the gradual conversion of the taxation of retirement benefits, which will run until 2040.

The highest German tax court wants to announce its decision on May 31st.

A former dentist from Hesse and a former tax advisor from Baden-Württemberg had sued against their tax assessments with the support of the Bund der Steuerpayers.

Both proceedings are conducted separately.

The upcoming ruling could affect all 22 million pensioners * - with potentially far-reaching consequences for the federal budget *.

Double taxation of pensions: "I will be punished"

"The whole thing is bad for me," said the dentist. He had not been able to maintain his standard of living in old age. "And I am punished by double taxation." He argues, among other things, that his Rürup pension and more than a dozen private supplementary pensions were taxed too high. The Federal Ministry of Finance, on the other hand, emphasized that the federal government did not want to take advantage of any pensioners: "We want fair taxation," said Rolf Möhlenbrock, head of the tax department at the ministry. "Nobody should be used in excess."

The conversion of the pension taxation has been going on since 2005, previously the pension contributions of the employees were taxed "upstream".

Once you have retired, you no longer have to pay any taxes on your pension contributions, with the exception of the so-called income share - the interest accrued in the meantime.

Double taxation of pensions: complex maneuver

From 2040 onwards, the pensions paid will be taxed in full, not the contributions.

In the 35-year transition phase, the tax burden on contributions will decrease, while at the same time the taxable portion of the pensions paid will increase - from 2005 to 2020 by two percent annually, now by one percent.

Pension increases, however, are already fully taxed during the transition phase.

The Federal Constitutional Court has stipulated that the contributions that have already been taxed may not be taxed again when the pension is paid out - that would be the forbidden double taxation.

This means that every pensioner must receive as much tax-free pension as he has paid in contributions from taxed income in the previous decades.

These calculations are based on average life expectancy and the life tables of the statistical offices.

Double Taxation of Pensions: A lot of contentious issues

In both cases, several complex individual points are involved.

The dentist's many supplementary pensions play a particularly important role.

The tax advisor deals with issues that are important to a much larger number of retirees.

Among other things, the Federal Fiscal Court must decide whether the basic allowance and the deductible health insurance contributions should be added to the tax-free part of the pension or not.

(dpa / utz) * Merkur.de is part of IPPEN.MEDIA.

List of rubric lists: © Peter Kneffel

Source: merkur

All news articles on 2021-05-25

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