Germany pension savings and tax relief

[Tarquin Farquhar]

Wanna bet? When I went 'officially' self employed I went to the BfA who told me to not bother paying into the state pension as I'll get bugger all back. I got a letter the other week saying that my pension would be something like €210 per month when I retire. I have a private pension plan or 2 along with various different insurances all of which are offset against tax.

May I ask, "how much" offset against tax? E.g. in the UK, my company SIPP payments are literally off the top: no PAYE, no NICs of either type, nothing. Can that be done in Germany? Do you have to be a Freiberufler (isn't that the status that is getting harder to establish?)?

I know that at a certain point I will have to see a German accountant, I'm not asking you to replace that, just trying to get an overview. Tax-free pension savings is now an important part of my plan, and I don't care if it is locked up till retirement.

[darmstadt]

Germans do not usually have private pension as the state system is so generous.

I understand that getting tax relief for payments into a foreign pension is next to impossible.

BICBW

tim

Wanna bet? When I went 'officially' self employed I went to the BfA who told me to not bother paying into the state pension as I'll get bugger all back. I got a letter the other week saying that my pension would be something like €210 per month when I retire. I have a private pension plan or 2 along with various different insurances all of which are offset against tax.

[BlasterBates]

Germans do not usually have private pension as the state system is so generous.

I understand that getting tax relief for payments into a foreign pension is next to impossible.

BICBW

tim

The German tax system allows you to offset against tax payments into health insurance and pension etc. However there is a limit, which I presume you'll hit. The Germans don't discrimnate so a pension or insurance paid to a foreign company is OK, as long as you give some explanation, best done through a German tax advisor. The law has changed recently so that with more recent contracts, insurance that is paid out before you retire might not qualify depending on when the contract was signed.

[Tarquin Farquhar]

Germans do not usually have private pension as the state system is so generous.

I understand that getting tax relief for payments into a foreign pension is next to impossible.

BICBW

tim

Thanks. I thought that might be the case. Unfortunately ISTM that there is nothing I can do to save or invest that is anything near as good as getting off 40% tax + all NICs on a chunk of my income. This makes Germany somewhat less appealing. Or at least, it makes the idea of staying with the UK Ltd Co more appealing.

[tim123]

Germans do not usually have private pension as the state system is so generous.

I understand that getting tax relief for payments into a foreign pension is next to impossible.

BICBW

tim

[Tarquin Farquhar]

Do any of our German people know about pension (or other) saving and tax relief? In the UK, I have started having my Ltd Co pay large company pension contributions to a SIPP: no tax or NICs to pay on that.

Now if I go and take a long contract in Germany and have to register for tax there, what scope is there for doing something similar? And if I maintain UK residence as well, is there a risk that whatever is tax-free in one country will just be taxed in the other?