Constitutional complaints about taxes on pensions fail in Karlsruhe
The two pensioners felt that they had been treated unfairly by the Retirement Income Act, which was passed in 2005 in response to an earlier Constitutional Court ruling, and took legal action against their tax assessments from 2008 and 2009 respectively. The law stipulates that old-age pensions are subject to income tax, albeit gradually with a long transition period. In return, old-age pension contributions are to be tax-deductible.
In the specific cases - which have now ended up before the Federal Constitutional Court - the Federal Fiscal Court found in May 2021 that the tax authorities had not collected too much from the two pensioners. However, for the first time, it laid down precise rules according to which the authorities must calculate double taxation.
This meant that the previous method of accounting could lead to prohibited double taxation. As a result, the German government decided that pension insurance contributions should be fully tax-deductible from 2023 - two years earlier than originally planned.
The pensioners whose appeals had been rejected took their case to the Federal Constitutional Court. However, the court has now declared their constitutional complaints inadmissible. The court stated that the couples had not made it clear that their basic rights had been violated.
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Because of their disagreement with the Retirement Income Act's taxation of pensions, the pensioners chose to sue their tax assessments from 2008 and 2009. Despite the Federal Fiscal Court ruling in their favor in May 2021, stating the tax authorities had not overcharged, their constitutional complaints were later found inadmissible by the Federal Constitutional Court in Karlsruhe. The court claimed the pensioners had not sufficiently proved their fundamental rights had been violated. Nonetheless, the German government decided to make pension insurance contributions fully tax-deductible from 2023, earlier than initially planned, due to the Federal Fiscal Court's guidelines against double taxation.
Source: www.stern.de
