Double taxation of pensions: Experts advise action - Current developments in 2024

Double taxation of pensions: Experts advise action - Current developments in 2024

According to a report from www.mainpost.de,

The possible double taxation of pensions is a topic that has been intensively discussed for years. A new regulation in 2002 led to downstream taxation, which was intended to avoid double taxation of pensions. Current changes since 2023 aim to avoid double taxation by making pension contributions fully deductible and slowing the increase in the tax rate. It is being discussed whether further measures are necessary to avoid double taxation. Experts are calling for retroactive legislative measures and a faster reduction in the taxable pension share. A case study shows that those born between 1975 and 1980 benefit most from the transition period to full pension taxation.

The most recent changes since 2023 stipulate that employed people can deduct 100 percent of their pension contributions from tax and the increase in the taxable pension share will be reduced. These measures aim to avoid double taxation. However, there is debate as to whether they are sufficient and there are calls for further legislative measures to be necessary to prevent double taxation. According to a case study, those born between 1975 and 1980 benefit most from the transition period to full pension taxation.