German court rejects complaints against double taxation of pensions
Germany’s federal fiscal court on Monday rejected as unfounded a retired couple’s objection to their retirement benefits being double taxed.
The court case resulted from a 2005 change in the law that made pensions liable to tax. Until then, pensions had been essentially tax-exempt as the contributions were made from taxed salaries.
Under the 2005 law, pension contribution payments gradually became essentially tax free while the taxable share of pension income was increased in a process set to conclude by 2040.
The couple’s objection centred on the transition period, during which double taxation can occur if the tax-exempt part of the pension are less than the contributions pensioners had earlier made from their taxed salaries.
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