Decision Made on Fairness Principle Implementation
Approximately 48,000 retirees are set to become taxable for the first time this year, with an estimated additional tax revenue of 410 million euros for the Federal Ministry of Finance. This development primarily affects self-employed individuals and employees who started receiving pensions from 2017 onwards, and those who have been paying into pension funds near the contribution assessment ceiling or making voluntary contributions.
The focus of the lawsuit, planned by the Federation of Taxpayers, is on the long transition period from 2005 to 2040, during which deferred taxation is being introduced. The lawsuit aims to examine double taxation of pensions, as these taxed incomes may be subject to income tax again during the payout phase.
The lawsuit targets individuals who have been paying their own contributions from taxed income during their working lives. This double taxation occurs because, in some cases, the same income is taxed both when it is earned and when it is received as a pension.
For a model lawsuit, plaintiffs typically consolidate evidence to argue improper double taxation due to overlapping tax jurisdictions or misapplication of tax treaties. Key points of eligibility and documentation generally include:
- Proof of pension income subject to double taxation.
- Status as either self-employed or employee during relevant periods.
- Start date of pension receipt (after 2017 in this case).
- Evidence of residency and applicable tax treaties or regulations that might prevent double taxation.
- Pension statements or payment records showing taxed pension income.
- Tax returns evidencing pension taxation in multiple jurisdictions or at multiple levels.
- Employment or self-employment records verifying work periods contributing to the pension.
- Identification documents and social security numbers or pension IDs.
- Any correspondence or rulings from tax authorities regarding pension tax assessments.
Retirees receiving a statutory pension since 2017 are recommended to consider joining the model lawsuit. Voluntary contributions to a pension fund are also affected by this double taxation issue.
It is crucial to note that, while no specific lawsuit template or model document is currently indexed, it may be necessary to consult specialized legal databases, pension law experts, or government tax agencies for jurisdiction-specific pension double taxation claims and their procedural requirements.
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[1] Despite the introduction of deferred taxation in 2005, individuals who have been self-employed or employees contributing to personal-finance schemes may face improper double taxation when receiving their pensions, as indicated in the lawsuit planned by the Federation of Taxpayers.
[2] Businesses and individuals affected by this issue should gather evidence such as pension statements, tax returns, employment records, and correspondence with tax authorities, as outlined in the key points of eligibility for the model lawsuit, to argue against this double taxation on their personal-finance and potentially recover overpaid taxes.
