Double taxation for high earners and the self-employed?

2023-09-29 06:59:47

The burden of proof for possible double taxation lies with the taxpayer. Image: Lucas Bäuml

The reform of pension taxation will now significantly reduce the burden on many future retirees. However, this still does not rule out double taxation, especially for higher earners and the self-employed.

The taxation of pensions will be regulated retroactively from the beginning of 2023 – provided the Bundestag and Bundesrat agree. The cabinet at least approved the draft of the Growth Opportunities Act and with it the reform of pension taxation. This is intended to avoid possible double taxation of pensions in the future. Experts and the highest financial court, the Federal Finance Court, have repeatedly called for this in recent years.

The Growth Opportunities Act provides for the taxation of pensions to be extended in old age. Only those who retire in 2058 or later will have to pay tax on their statutory pension in full – and not, as originally planned, the new pensioners from 2040 onwards. Younger people will also be able to claim the full amount of their pension contributions for tax purposes from 2023. According to plans from 2005, this should not be the case until 2025.