Pensions from occupational pension schemes are part of the so-called basic provision, like pensions from the statutory pension insurance. This means:
You can, for example, declare tax consultancy costs (for the R form), pension advice, or a lawyer if they support you with pension matters. However, you must prove these higher expenses.
Hans Müller retired on 1 January 2009 and received a pension of 12,000 Euro last year. For Hans Müller, 58 percent of his pension is taxable, and the pension allowance is 42 percent. So, Müller would have to declare 6,960 Euro as income to the tax office for the year.
However, if he has no other income, he does not have to submit a tax return, as the amount is below the basic allowance of 10,908 Euro (2023). The lifelong pension allowance for Hans Müller is 5,040 Euro. He would only have to tax income above this allowance if it also exceeds the basic allowance.
However: Income from renting and leasing or capital gains must be added to the income.
If Hans Müller were to receive a pension of 15,000 Euro and retire in 2023, he would have to tax 12,375 Euro (82.5 percent) of his pension and therefore also submit a tax return.
Note: The pension allowance for Müller remains the same until the end of his life. Even if his income from the pension increases due to pension adjustments, only 5,040 Euro would be tax-free each year in the first example. The allowance refers to a specific amount of money, not a percentage of the respective pension. Thus, Mr Müller must fully tax future pension adjustments.
Text reviews: How is my pension from an occupational pension scheme taxed?
5.00
of 5
Number of reviews: 1
