As of: March 27, 2024, 6:01 p.m
By: Amy Walker
Comments
Press
Split
With the Growth Opportunities Act, the federal government has largely put an end to double taxation of pensions.
But a group of pensioners is still disadvantaged.
Berlin – It’s not just companies that benefit from the Growth Opportunities Act that was finally passed last week.
Pensioners also receive tax relief.
It does not affect those who are already receiving a pension;
The law means tax relief amounting to thousands of euros for prospective pension recipients.
The traffic light coalition has thus complied with a request from the Federal Finance Court, which had warned against the so-called double taxation of pensions.
But as
Wirtschaftswoche
reports, the Growth Opportunities Act only partially solves the problem.
A group of existing pensioners could still be taxed twice.
According to the newspaper, the traffic light coalition is already working on further legal adjustments.
Double taxation of pensions resolved with the Growth Opportunities Act?
The Growth Opportunities Act actually does not relieve anyone, but rather prevents future pensioners from being unfairly
burdened
.
The pension insurance contributions that employees pay today have a positive - i.e. tax-reducing - effect on the tax return.
Later, pensioners pay taxes on the pension they receive.
So far so good - only a few years ago there was a mistake when converting the pension system, which would have resulted in new pensioners paying more taxes on their pension from 2025 onwards than they would have "got back", so to speak, through their tax return during their working life.
This double taxation might have been unconstitutional.
Pensions play an important role for retirees.
How much money is left?
© Thomas Warnack/dpa
What the traffic light government has now done: Retroactively from 2023, the tax share for each new retirement age group will only increase by 0.5 percentage points instead of the previous 1.0 percentage points.
This means: Anyone who retired in 2023 will not have to pay tax on 83 percent, but only 82.5 percent of their pension.
This means that the pension allowance increases to 17.5 percent.
For those born in 2024, the tax rate increases to 83 percent, for those born in 2025 to 83.5 percent, for those born in 2026 to 84 percent and so on.
The 100 percent will only be reached from 2058: Anyone who retires from that year on will have to pay tax on their entire pension and will no longer have any pension allowance available.
Start of retirement |
Taxation according to the current model |
With the new model |
2023 |
83% |
82.5% |
2025 |
85% |
83.5% |
2030 |
90% |
86.0% |
2035 |
95% |
88.5% |
2040 |
100% |
91.0% |
This means that the taxation rules are now better coordinated, meaning that people who will retire in 2040 will save significant amounts of tax.
Ampel probably needs to follow up again
However, according to a report in
Wirtschaftswoche,
the system is still not perfect.
There is a gap of pension recipients who have to fear double taxation.
According to the business magazine, this primarily affects self-employed people and people with high incomes who earn more than 87,600 euros gross per year and are therefore above the pension insurance contribution assessment limit.
In total, such a pensioner with 45 years of pension contributions could pay 28,300 euros too much in taxes in his lifetime.
Without the Growth Opportunities Act, it would have been up to 103,500 euros.
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The new traffic light law is definitely an improvement.
But in order to completely eliminate double taxation, the government has to take action again.