Factsheet for measure
DE-2023-1/3036
– measures in Germany
Tax-deductible pension contributions
Absetzbare Rentenbeiträge
Background information
The war in Ukraine and the rise of inflation are leading to enormous price increases for heating, hot water and electricity. The new regulation of tax-deductible pension contribution is part of the relief package of the federal government, which has a volume of €65 billion and was passed on 16 December 2022.
The relief is intended to avoid double taxation of pensions. The decision goes back to the coalition agreement of 2021, with which the new regulation was to come into force in 2025, and now comes into force two years earlier on 1 January 2023 due to the increased financial burden on citizens.
Legally, the new regulation is linked to the ruling of the Federal Fiscal Court of 19 May 2021 on the "Determination of the amount of a possible double taxation of old-age provision expenses and old-age pensions".
Content of measure
Taxpayers are to be able to fully tax deduct their pension contributions from 1 January 2023.
In the future, pensions will be taxed in the payout phase in old age. To compensate for this, expenses for old-age provision during employment can be claimed as special expenses for tax purposes. This is to avoid double taxation - i.e. taxation of both the future pension payout and taxation of the income from which the payments into the pension fund were previously made. This is intended to reduce the tax payments of employees. This applies to contributions paid into the statutory pension insurance, the agricultural pension fund, occupational pension schemes and basic pension contracts, the so-called "Rürup" pensions.
Use of measure
According to the federal government, the full tax deductibility of pension contributions will reduce the tax burden for employees by about €3.2 billion in 2023 and by €1.8 billion in 2024.
According to statistics of the German Pension Insurance of June 2022, the number of insured persons on 31 December 2020 was 56.77 million. Of these, the number of actively insured persons was 39.04 million of whom 32.01 million were employees obliged to pay insurance contributions. The number of passively insured persons was 17.73 million.
According to statistics of the German Pension Insurance of June 2023, the number of insured persons on 31 December 2021 was 57.01 million. Of these, the number of actively insured persons was 39.21 million of whom 32.55 million were employees obliged to pay insurance contributions. The number of passively insured persons was 17.80 million.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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Does not apply to businesses
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Applies to all citizens
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Actors and funding
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Actors
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Funding
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National government
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Unknown
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Unknown
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
-
Unknown
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Main level of involvement: N/A
Involvement
No data available.
Views and reactions
No data available.
Sources
