Retirement Income Act

With the Retirement Income Act, the taxation of pensions was fundamentally reorganized. It is an article law that changes the EStG in particular. The law of 5 July 2004, BGB1. 2004 Part I is on 1.1. Entered into force in 2005. The starting point was a ruling by the Federal Constitutional Court, which found the unequal tax treatment of pensions and pensions as unconstitutional.
The aim of the law is the transition to so-called downstream taxation. The contributions to the pension insurance are gradually made deductible. So far, only a limited tax claim was possible within the framework of the special expenses deduction. In return, the income from the pension insurance should also gradually become fully taxable. Before, they were only doing this with the so-called revenue share. This will take place in a transition period lasting decades, so that the new system will not be fully applicable until 2040. The changes were mainly implemented in income tax.

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