You are moving permanently to Germany but have a pension plan in another country and now want to transfer it to Germany?
How can you ensure that the saved amount does not lapse? What is the tax situation?
STC has summarised the most important information for you.
You can find more information on the respective countries here:
UK
Ireland
USA
Canada
Switzerland
How can you transfer your pension provision from abroad?
1. insurance periods completed abroad
In principle, there is no "total pension". The pension is paid out by each country itself.
However, periods from abroad can be credited to your German pension. This is decisive for the question of whether the minimum insurance period for a pension entitlement has been completed. The periods are added together within EU member states and countries that have concluded a social security agreement with Germany.
The only important thing here is that the periods are added together either under European law or under the social security agreement; it is not possible to mix the two. For example, periods from Germany, France and Canada cannot be added together. This is because European law is relevant between France and Germany and the German-Canadian agreement is relevant between Germany and Canada.
Please note that insurance periods are not taken into account if Germany has not concluded a social security agreement with the respective state and it is not a member state of the EU.
Whether and from when you are entitled to a pension in the respective country depends on the country-specific law and requires an individual examination.
2. What do you have to consider in terms of tax law?
2.1. Tax liability in the state of residence of the pensioner
A double taxation agreement can regulate that the pension must be paid in the pensioner's country of residence. Consequently, in Germany. If you have already paid taxes abroad, you can refund them.
2.2. Tax liability in the country of the pension relationship
It is also possible that the arrangement says, that the taxes must be paid in the country in which the pension is drawn. In this case the tax liability is in the source state or the fund state. The foreign pension is generally tax-free in Germany, but is subject to the progression proviso. The foreign pension is taken into account when determining the tax rate and you have to pay higher taxes on the German pension.
2.3. Tax liability in both countries
The pension may also be taxable in both countries under a double taxation agreement. But don't worry, there is no actual double taxation. Rather, the foreign tax is credited against the German tax.
Please note that as of 1 July 2011, old-age pensions paid by foreign pension providers (both from European member states and third countries) are subject to health and long-term care insurance contributions.
Basically, only general statements can be made here. It is therefore important that you always check your country-specific situation individually. STC will be happy to help you with this.
3. Conclusion
If you want to transfer your old-age provision from abroad to Germany, you should carefully check the respective regulations and agreements between the countries. It is advisable to seek individual advice from a specialist or an insurance consultancy in order to clarify your personal situation in the best possible way.
If you have any further questions or require further information, please do not hesitate to contact STC.
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