Pension insurance contributions
Previous regulation
The Retirement Income Act of 2005 introduced a special expense deduction for pension expenses that increases by 2 percent each year until 2025 as part of the switch to taxation of pensions on a deferred basis. The gradual increase in the special expenses deduction ended on December 31, 2022.
Full special expenses deduction
The Annual Tax Act 2022 (JStG 2022) introduced a full special expenses deduction for retirement provision expenses (pension insurance contributions) with effect from 2023 (Section 10 (3) EStG as amended by JStG 2022). It was originally planned to allow the full special expenses deduction for the first time in 2025. For 2023, this will increase the special expenses deduction by four percent. It remains unchanged that pension expenses can be taken into account up to the maximum contribution to the knappschaftliche Rentenversicherung West. The maximum contribution in 2023 is €26528 (= 24.7% of the income threshold €107,400.00).
Abolition of the pension lump sum
As a consequential amendment, the transitional regulation on the deduction of pension insurance contributions in the form of a pension lump sum when levying income tax (Section 39 b (4) of the German Income Tax Act) no longer applies.
Status: December 28, 2022
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