Germany: commission proposes pension tax changes
GERMANY – The German government’s pensions commission has proposed to end the tax-deductible status of life insurance premiums and alter the tax rules for pensions.
Among the proposals in the Ruerup commission’s report on tax-treatment of the pensions presented to the government this week, recommendations were made to eliminate the tax deductibility of contributions to life insurance policies, and the tax exemption of payouts of new policies.
The commission is headed by academic Bert Ruerup.
Finance minister Hans Eichel has said the recommendations were interesting and that the government would look into the implications of the proposals, and propose legislation in time for 2005.
Also proposed by the commission is the progressive move to a tax-free contribution, taxed-benefit pension system.
Germany’s mutual fund association, BVI, has been aiming to obtain a level playing field for life insurance and pensions products for several years, but a spokesman said it had yet to fully analyse the commission’s proposals.