Germany has thrown light on the delayed social Insurance

Germany has thrown light on the delayed social Insurance

The member of German parliament and state secretary Hartmut Koshuk has presented recently the information on current system of the taxation of pensions of the country.

According to Koshuku, now there are more than pensioners in Germany are subject to the taxation as a result of changes in system of the taxation of pensions; transition to so-called system «delayed taxation» (nachgelagerte Besteuerung).

Entered within the limits of the Law on the income at a retirement the system of the delayed taxation is applied in Germany since 2005 according to the decision of Federal Constitutional Court of Germany.

The court has decided that the old system is unconstitutional as pensions for public service are processed differently.

Koshuk has allocated detailed data about gradual transition to system of the delayed taxation, having noticed that the taxable part of pension will gradually increase till 2039. For all pensions which have begun in 2005, or till January, 1st, 2005 (2004), the taxable part has made 50 %. After that the taxable part increases by 2 percentage points annually to 80 % in 2020. With 2021 for 2040 the taxable share should increase on 1 percentage point annually while, at last, pensioners who retire in 2040, will be obliged to pay the tax from all sum of pension (100 % a taxable part). Transition to the full delayed taxation will be completely complete.

However the pension gain is taxed on 100 %.

Koshuk has underlined that now certain kinds of pensions are released from the taxation, including the pension income of obligatory insurance of accident, and of military pensions and pensions under the heavy form of physical inability.

State secretary Koshuk has finished the comment, having declared that a determinative in definition of, whether the tax is subject to payment from pensions which represent the income sum. If the income exceeds the current basic grant at a rate of 8 thousand 004 euros (10 thousand 337 US dollars) it can be subject to the taxation (16 thousand 008 euros for a married couple).