Millions of pensioners in Germany are liable to pay taxes. But many people don't know about it until the letter comes from the tax office.
Berlin – In July the statutory pension will be increased by 4.57 percent. This means that 114,000 pensioners will now become liable to pay taxes. According to a report in the
Süddeutsche Zeitung,
this emerges from data from the Federal Ministry of Finance. However, many of those affected are not aware that they have to submit a tax return. According to
the
MDR,
completely surprised pensioners repeatedly turn to the Taxpayers' Association.
Suddenly taxable: “Pensioners are completely surprised”
“You can actually see again and again from the feedback, calls and inquiries here that pensioners are blown away when they receive a request from the tax office for several years to submit a tax return,” explains Daniela Karbe-Geßler, head of tax law and tax policy at the Taxpayers' Association, the broadcasting company.
New retirees in particular should be careful: they have to pay tax on a higher portion of their pension than long-term retirees. The background: The taxation of pensions was changed in a reform in 2004. Gradually, an increasingly larger part of the pension becomes taxable, while contributions during the working phase are made tax-free. The later the pension starts, the higher the taxable portion of pension income.
You can download our pension guide for free here.
Tax return and basic allowance: Who is liable to pay taxes as a pensioner?
But how can you tell whether you are a pensioner or not? It is not the tax office that points this out as a precaution - but rather the pension insurance. According to
the MDR
, the pension information that you receive every third year from the age of 55 contains
the following note: “Part of your pension is part of your taxable income, the remaining amount is the tax-free part of the pension. We cannot assess whether you actually have to pay taxes on the taxable portion of your pension. We report the pensions we pay to the tax authorities of the individual federal states. Despite our report, you must check whether you have to submit an income tax return.”
Pensioners must submit a tax return if their total income exceeds the annual basic allowance. The basic tax allowance applies to all taxpayers and refers to the annual income up to which no tax has to be paid. It has currently been increased by 696 euros to 11,604 euros at the turn of the year to compensate for inflation.
In addition to the amount of the pension and the taxable portion of it, other factors are also decisive for the tax liability of pensioners, such as other income (for example: rental income, company pensions). Currently, more than 6.3 million of the 21 million pensioners in Germany have to pay taxes in the current year.
With material from AFP and dpa