![]() ![]() ![]() Nevertheless, it should be noted that German pension plans are somewhat unique, and foreign plans often do not resemble German plans. Payments from foreign pension plans are tax-exempt, if the foreign pension plan resembles a German tax-qualified pension plan or annuity. However, the German Federal Fiscal Court (Bundesfinanzhof) held that certain payments from tax-qualified company pension plans or annuities are exempt from German inheritance tax. Company based pension plans or tax-qualified annuities are generally subject to taxation under the German Inheritance Tax Act. Payments from German (or foreign) government pension schemes are excluded from taxation in Germany. Any compensation for a disclaimer of inheritance (Ausschlagung).Transfer on death to a foundation (Stiftung) or foreign pool of assets (Vermögensmasse ausländischen Rechts) - see special article on taxation of trust under German tax law - and.the death benefit of a life insurance (Lebensversicherung) or annuity (Rentenversicherung) or other contractual death benefit.Gift mortis causa (Schenkung auf den Todesfall).An inheritance (Erbschaft), a legacy (Vermächtnis) and/or a forced share (Pflichtteil).For example, tax is imposed on the following transfers: German inheritance tax is imposed on any transfer of property at death. This can be used to minimize the applicable tax.Įxample: If A had made the gift in 1999, he could have used the tax-free exemption twice and the (progressive) tax rate may be lower. See § 14 ErbStG.Įxample: A makes a lifetime gift to his sole child in 2010 and dies in 2019 leaving his estate to his child, the value of both transfers is aggregated in order to calculate the tax. Germany has a unified inheritance and gift tax systems: Gratuitous transfers upon death or inter vivos, in particular a gift (Schenkung) between the same persons within 10 years are aggregated and the tax is (re-) calculated based on the aggregated taxable acquisition. Accordingly, the beneficiary must pay the German inheritance taxes on all transfers received. In contrast to an estate tax, an inheritance tax does not attach to the estate itself but instead is imposed on the acquisition (Erwerb) of the beneficiary. Germany does not levy an estate tax (Nachlasssteuer) but an inheritance tax (Erbschaftsteuer). General Concept of the German Inheritance Tax Estate and Gift Tax Treaty), Greece, France, Sweden, Denmark and Switzerland, that may preclude Germany from imposing inheritance tax. Please note: Germany has tax treaties with the USA ( Germany-U.S. The taxation of estates in Germany is codified in the Inheritance and Gift Tax Act (Erbschafts- und Schenkungsteuergesetz) - hereinafter ErbSt. Additionally, other German tax laws, such as the German General Fiscal Code (Abgabenordnung) - hereinafter AO - and the Valuation Act (Bewertungsgesetz)- hereinafter BewG apply.
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