Lower Saxony Fiscal Court – appeal filed
The Lower Saxony Tax Court has ruled (decision of 23.5.2005, FG Niedersachsen 23.5.05, 7 S 4/03, appeal under X R 11/05): Pension insurance contributions paid in the years prior to 2005 are also deductible as income-related expenses without limitation. This eliminates the limitation that previously applied to the deduction of special expenses. The Retirement Income Act had triggered this controversial topic, because pensions – for example from life insurance policies – which the insured person will receive after the year 2040 are taxable at 100%. If, on the other hand, only the limited deduction as special expenses is allowed, this would lead to unconstitutional double taxation in many cases. Dogmatically, this is justified by the fact that it always has to be examined primarily whether expenses are income-related expenses or business expenses – only secondarily do special expenses come into question when classifying insurance premiums. With regard to pension contributions paid, all tax assessments should not be kept open only if the pension does not flow until after 2039 and therefore when it is fully taxable. This is because even in all other cases in which the taxable portion of the pension is still less than 100%, it could be a case of anticipated income-related expenses for the later pension. Several proceedings are pending in this regard, including two appeals before the BFH. In the meantime, the tax authorities agree to the suspension of the proceedings.
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