Field help:
(2019)
Long-term financial burdens
Tick this box if you have made payments to a third party in the form of a long-term financial burden.
Pensions result from the transfer of assets. A pension is understood to exist in the case of regular payment of the same amount. By contrast, long-term financial burdens are recurring payments, the amount of which can be adjusted according to the financial situation of the parties involved.
Important: The deductibility of pensions or long-term financial burdens depends on the date of the relevant contract. The Annual Tax Act 2008 (Jahressteuergesetz) abandons the differentiation between pensions and long-term financial burdens. The long-term provisions paid are now always recognised as "long-term financial burdenы". This means there is no need to determine the income share of life annuities, as was previously the case. This means:
- The person paying may deduct the long-term provision payments in full as special expenses (sect. 10, para. 1, no. 1a of the Income Tax Act (EStG)).
- The person receiving the long-term provision payments must specify the payments in full as "Other income" for taxation purposes (sect. 22, no. 1a of the Income Tax Act (EStG)).
