Taxation of German State Pensions

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Flybytheseat

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I will be entitled to approx €5K per annum German state pension from 67. I've read that this is taxable in Germany and not taxable in Ireland which leads me to the following questions:

1. What rate of tax will be due in Germany ?
2. Is there a tax free amount or tax credits I can avail of for German tax ?
3. Do I need to submit an annual German tax return ?
4. How is the rest of my Irish state and AVC pension taxed ?
5. Do I need to include details of my Irish pensions on my German tax return if I am required to file ?
6. Can I deduct the German Pension from my Irish declared income thus resulting in a lower tax rate in Ireland or are they somehow linked ?
7. Can I avail of essentially tax credits from two countries and pay little or no tax in Germany and also avoid paying higher rate tax in Ireland given that my combined pension will be approx €43K Irish and €5K German State Pension.
 
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In general, pensions due to employment in public services in EU countries are taxable in that country and in Ireland; whereas pensions due to employment in the private sector in EU countries are taxable only in Ireland

You may have to file a form to ensure that no tax is deducted in Germany but this will be included with your pension claim
 
jpd said:
In general, pensions due to employment in public services in EU countries are taxable in that country and in Ireland; whereas pensions due to employment in the private sector in EU countries are taxable only in Ireland

You may have to file a form to ensure that no tax is deducted in Germany but this will be included with your pension claim
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Revenue website seems to state tax is payable in Germany and seems pretty clear on that fact:
https://www.revenue.ie/en/jobs-and-pensions/pension/private/german.aspx
 
Flybytheseat said:
Revenue website seems to state tax is payable in Germany and seems pretty clear on that fact:
https://www.revenue.ie/en/jobs-and-pensions/pension/private/german.aspx
Click to expand...
Looing at that, you won't have to include the German pension on an Irish tax return (it's only taxable in Germany) and you'll only pay tax in Ireland on your other income as normal.

You'll have to pay tax in Germany on the German pension presumably but I don't know anything about the tax system over there I'm afraid.
 
Assuming the 5k p.a. state pension from the GRV is your only source of German income (and I am assuming you are not resident in Germany) then it is all tax free in Germany as it's well below the current tax free allowance (Grundfreibetrag) of €10,908 for a single person. You do not need to submit a tax return and there would be no point in doing so as there is no tax being paid so no tax to refund. There is also a Rentenfreibetrag, which is a percentage of your pension that is tax free. This percentage depends on when you begin drawing a pension. For people drawing a pension in 2023 for the first time, it's 19% (next year it will be 20% and so on, this is due to a phased in change of the taxation of German state pensions). So, only 81% of your pension is even eligible to be taxed, but this is ca. 4k so even further below the ca. 11k tax free allowance. In short, you won't ever need to worry about tax returns for this small pension.
 
I always thought that if you worked in Germany for a time and then returned to Ireland that any mandatory pension contributions (Rentenversicherung I think) that you made were counted as PRSI contribution credits when calculating your entitlement to an Irish contributory state pension.
From the above, it sounds like you can actually get a German state pension instead. Is there a minimum amount of contributions that you need to have made to get the German state pension?
 
Persius said:
I always thought that if you worked in Germany for a time and then returned to Ireland that any mandatory pension contributions (Rentenversicherung I think) that you made were counted as PRSI contribution credits when calculating your entitlement to an Irish contributory state pension.
From the above, it sounds like you can actually get a German state pension instead. Is there a minimum amount of contributions that you need to have made to get the German state pension?
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Minimum 5 years of contributions are required.
 
murphaph1 said:
Assuming the 5k p.a. state pension from the GRV is your only source of German income (and I am assuming you are not resident in Germany) then it is all tax free in Germany as it's well below the current tax free allowance (Grundfreibetrag) of €10,908 for a single person. You do not need to submit a tax return and there would be no point in doing so as there is no tax being paid so no tax to refund. There is also a Rentenfreibetrag, which is a percentage of your pension that is tax free. This percentage depends on when you begin drawing a pension. For people drawing a pension in 2023 for the first time, it's 19% (next year it will be 20% and so on, this is due to a phased in change of the taxation of German state pensions). So, only 81% of your pension is even eligible to be taxed, but this is ca. 4k so even further below the ca. 11k tax free allowance. In short, you won't ever need to worry about tax returns for this small pension.
Click to expand...
Thanks - most helpful. Yes Im no longer a German resident living back in Ireland for over 20 years.
 
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