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What changes have been made to income and wage tax since January 1, 2005 as a result of the "Retirement Income Act"?

The core of the Retirement Income Act is the harmonization of the taxation of retirement benefits through the general transition to a system of deferred taxation. In the final stage, it is envisaged that old-age pensions will be taxed in full - as is already the case with civil servants' pensions - and that contributions made to build up a pension will be exempt from income tax.

In addition to these constitutionally required legal amendments, further changes have been made in the following areas:

  • New regulations for company pension schemes,
  • Simplifications for funded private pensions (Riester pension) and
  • Limitation of the tax privilege for endowment insurance policies

Note

You can also find information on the Retirement Income Act in the "Tax tips for senior citizens".

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