Anyone who leaves Germany and holds a basic pension (Basisrente, Rürup-Rente) first wants to know whether the contract continues at all. From a legal point of view, continuing a Rürup contract after emigration is, as a rule, unproblematic: the contract does not end because you move away, and the state does not reclaim any tax relief. What changes is the tax treatment of further contributions and, later, of the pension payments. Further questions follow: what happens in the year of departure, who is responsible for taxing the pension later, and what becomes of the survivors’ cover if the children live abroad? This article explains the German legal position as at October 2026.
What Defines a Basic Pension in Law
The Rürup pension is regulated by statute as a basic pension in Section 10 (1) no. 2 (b) (aa) of the Income Tax Act (Einkommensteuergesetz, EStG). Contributions qualify if they serve to build up the taxpayer’s own funded retirement provision and the contract provides only for the payment of a monthly life annuity (Leibrente) that does not begin before the age of 62. For contracts concluded before 1 January 2012, a pension start from the age of 60 is sufficient under Section 10 (6) EStG. In addition, an occupational disability, reduced earning capacity or survivors’ pension may be agreed.
The key provision for every question relating to emigration is Section 10 (1) no. 2 sentence 2 EStG: the entitlements may not be inheritable, transferable, usable as collateral, saleable or capable of being converted into a lump sum. In addition, the contract must be certified under Section 5a of the Pension Contracts Certification Act (Altersvorsorgeverträge-Zertifizierungsgesetz). This lock-in is the price of the deduction as a special expense (Sonderausgabenabzug), and it remains in place no matter where the insured person lives later on.
Continuation After Moving Abroad: The Contract Carries On
Moving your residence abroad is not a ground for terminating a basic pension. The law links neither the existence of the contract nor the tax advantages already granted to a residence in Germany. Anyone who emigrates therefore essentially has two options:
- Continue paying contributions: The contract continues unchanged. Whether this makes sense depends on whether the contributions are still tax deductible after the move (see below) and on how the new state of residence treats the later pension payments.
- Making the contract paid-up (Beitragsfreistellung): Payments stop, the existing capital remains in the contract and continues to earn interest or to be invested in accordance with the contract terms. With unit-linked policies, you continue to bear the capital market risk, and ongoing administrative costs usually continue to be charged.
Before moving, you should check the contract terms to see whether the provider accepts contributions from a foreign bank account, transfers pension payments abroad and which proof (such as life certificates) it requires during the payout phase. These points are not a matter of tax law but of the individual contract.
No Clawback Mechanism as with Riester
The most important difference from the Riester pension: the basic pension has no allowances (Zulagen) and no rule on harmful use (schädliche Verwendung) upon emigration. With Riester, the state support can be reclaimed under Section 95 EStG if the place of residence at the start of the payout phase lies outside the EU and the EEA. Details can be found in the article on repayment of Riester support when emigrating. With the basic pension, by contrast, the special expense deduction claimed in earlier years remains in place; emigration alone does not trigger any subsequent taxation.
Changing Provider
The statutory non-transferability does not completely rule out a change of provider. Under Section 3 no. 55d EStG, the transfer of entitlements from a certified basic pension contract to another certified contract of the same taxpayer is tax free. Whether the existing provider allows such a transfer under the contract and what costs it involves must be clarified in the individual case. A switch to a foreign product that is not certified under German law is not possible by this route.
Cancellation, Surrender and Lump-Sum Payment
Many emigrants would like to take the accumulated capital with them. In principle, the basic pension does not provide for this. Under Section 168 (3) no. 1 of the Insurance Contract Act (Versicherungsvertragsgesetz, VVG), the policyholder’s statutory right of cancellation is excluded if, in a certified basic pension contract, the parties have excluded the realisation of the entitlements in accordance with Section 10 (1) no. 2 sentence 1 (b) EStG. In practice, insurers therefore convert a cancellation into a paid-up policy; the surrender value is not paid out.
The law provides for an exception only for small pensions (Kleinbetragsrenten): under Section 10 (1) no. 2 sentence 3 EStG, the provider and the insured person may agree that a small pension within the meaning of Section 93 (3) sentence 2 or 4 EStG is settled by a one-off payment; it is also permissible to combine up to twelve monthly payments into one payment. This settlement concerns the payout phase and is not a way of withdrawing the capital early when moving abroad.
For emigrants, this means: a certified Rürup contract cannot be cancelled with ordinary notice in order to have the balance paid out. The exclusion of the ordinary right of cancellation follows from the law and not merely from the provider’s contract terms. Anyone who wants to make their capital available before moving abroad should take this into account in their planning and have the alternatives examined, namely continuation, a paid-up policy or a tax-free change of provider under Section 3 no. 55d EStG.
Other Ways of Unwinding the Contract
The statutory exclusion concerns ordinary cancellation. In addition, other approaches to unwinding a contract may come into consideration in the individual case, for example rescission (Anfechtung) if the contract was brokered with incorrect promises regarding protection from seizure or tax advantages, revocation (Widerruf) or extraordinary termination for good cause. Whether one of these routes succeeds depends on the individual contract, the contract terms and the circumstances in which it was concluded; the tax consequences of unwinding the contract must also be examined. Dr. Fiala explained these approaches in an article on unwinding Rürup and basic pension contracts (in German) published in 2021.
Special Expense Deduction After Moving Abroad
The Rule: Deduction Only with Unlimited Tax Liability
Contributions to a basic pension are special expenses (Sonderausgaben). Since 2023, they have been fully deductible up to the maximum amount. The maximum amount under Section 10 (3) EStG is based on the maximum contribution to the miners’ pension insurance (knappschaftliche Rentenversicherung) and is EUR 30,826 for 2026, or EUR 61,652 for spouses assessed jointly. For employees and civil servants, it is reduced by certain amounts.
The deduction requires that you are subject to unlimited income tax liability in Germany. Anyone who gives up their residence and their habitual abode becomes subject only to limited tax liability with their German income. When the habitual abode in tax law actually ends deserves a separate examination, because keeping a home in Germany can mean that unlimited tax liability continues.
For persons with limited tax liability, Section 50 (1) sentence 4 EStG in principle excludes the application of Section 10 (1) and (3) EStG. Contributions to a basic pension then no longer have any tax effect in Germany.
Exceptions That Are Often Misunderstood
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| Constellation | Legal basis | Basic pension contributions deductible? |
|---|---|---|
| Unlimited tax liability continues (residence or habitual abode in Germany) | Section 1 (1) EStG | Yes, under the general rules |
| Application for deemed unlimited tax liability | Section 1 (3) EStG | In principle yes, if the requirements are met |
| Employee with limited tax liability and German employment income | Section 50 (1) sentence 5 EStG | No; only contributions under Section 10 (1) no. 2 (a) qualify (statutory pension insurance, among others) |
| Compulsory member of a professional pension scheme (berufsständisches Versorgungswerk) | Section 50 (1a) EStG | Concerns only contributions under (a), not the private basic pension |
| Other limited tax liability | Section 50 (1) sentence 4 EStG | No |
Deemed unlimited tax liability (fiktive unbeschränkte Steuerpflicht) under Section 1 (3) EStG requires an application. It applies only if at least 90 per cent of your income in the calendar year is subject to German income tax or if the income not subject to German tax does not exceed the basic tax-free allowance (Grundfreibetrag). This amount may be reduced depending on the state of residence. The amount of the foreign income must be proven by a certificate from the foreign tax authority (Section 1 (3) sentence 5 EStG). For emigrants who earn income in their new state of residence, these limits are often out of reach.
A further hurdle arises from Section 10 (2) sentence 1 no. 1 EStG: provision expenses (Vorsorgeaufwendungen) may not be directly economically connected with tax-free income. A counter-exception applies under narrow conditions to income from the EU, the EEA and Switzerland that is tax free in Germany under a double taxation agreement, where the other state does not allow the provision expenses to be taken into account in any way.
The Year of Departure
In the calendar year of departure, unlimited and limited tax liability exist one after the other. Under Section 2 (7) sentence 3 EStG, the German income earned during the period of limited tax liability is included in the assessment for unlimited tax liability. Contributions paid up to the date of departure can be taken into account as special expenses within this framework. How contributions that fall due in the year of departure only after the move are to be treated should be clarified in advance. Where the legal position is unclear, a binding ruling from the tax office (verbindliche Auskunft, Section 89 (2) of the Fiscal Code, Abgabenordnung, AO) is advisable before making larger one-off contributions.
Returning to Germany
If you later return and once again become subject to unlimited tax liability, contributions are in principle deductible again from that point onwards. A paid-up contract can be resumed, depending on the contract terms. The law does not provide for a catch-up deduction for the years spent abroad.
Taxation of the Pension with a Residence Abroad
Deferred Taxation under Section 22 EStG
Payments from a basic pension are other income (sonstige Einkünfte) under Section 22 no. 1 sentence 3 (a) (aa) EStG. The taxable portion (Besteuerungsanteil) depends on the year in which the pension begins. For a pension starting in 2026, it is 84 per cent; it rises by 0.5 percentage points for each later pension cohort and reaches 100 per cent for a pension starting in 2058. The tax-free portion of the pension is fixed as a set amount according to the year in which the pension begins; later pension increases are fully taxable.
Limited Tax Liability under Section 49 (1) no. 7 EStG
Germany can tax the pension even after you have moved abroad. Under Section 49 (1) no. 7 EStG, German income includes payments under Section 22 no. 1 sentence 3 (a) EStG that are granted, among others, by German insurance companies. A basic pension from a German insurer therefore in principle falls within limited tax liability.
Special rules apply to persons with limited tax liability, and they often surprise emigrants in retirement:
- No basic tax-free allowance: Under Section 50 (1) sentence 2 EStG, taxable income is increased by the basic tax-free allowance. Even a smaller pension can therefore trigger tax.
- No special expenses: Health and long-term care insurance contributions and most special expenses are in principle disregarded under Section 50 (1) sentence 4 EStG.
- Competent tax office: Anyone with limited tax liability who receives exclusively income under Section 49 (1) no. 7 and 10 EStG is assessed by the Neubrandenburg tax office (Finanzamt Neubrandenburg) under Section 1 of the Income Tax Jurisdiction Ordinance (Einkommensteuer-Zuständigkeitsverordnung). If other German income is added, such as rental income, a different tax office may be responsible.
- Application under Section 1 (3) EStG: If the requirements are met, deemed unlimited tax liability can also be more favourable in the pension phase, because the basic tax-free allowance and special expenses then become available again.
The consequences of emigration for the statutory pension, health insurance for pensioners and payment of the pension abroad are covered in the article on German pension insurance when emigrating.
Double Taxation Agreements
Whether Germany may actually tax the basic pension or whether the right of taxation lies with the new state of residence is decided by the relevant double taxation agreement (Doppelbesteuerungsabkommen). The agreements allocate private life annuities, retirement pensions and social security pensions in different ways; some assign the right of taxation to the state of residence, others leave Germany a right of taxation as the source state. A general statement for all states is not possible. The fundamentals are explained in the article on double taxation agreements for emigrants.
If the agreement assigns the right of taxation to the state of residence, the relief in Germany must as a rule be claimed from the tax office. This usually requires a certificate of tax residence (steuerliche Ansässigkeitsbescheinigung) issued by the foreign state. How the new state of residence itself taxes the pension and whether it credits the German tax is governed by the law there; a local adviser should be consulted on this.
Survivors’ Cover and Death Abroad
Because the entitlements are not inheritable, the capital does not form part of the estate when the insured person dies. Without agreed survivors’ cover, the balance may, under the contract terms, remain with the community of insured persons. For tax purposes, a survivors’ pension is permissible only for the spouse (via Section 2 (8) EStG also the registered civil partner) and for children for whom the insured person is entitled to child benefit (Kindergeld) or to an allowance under Section 32 (6) EStG (Section 10 (1) no. 2 (b) (aa) sentence 2 EStG). An orphan’s pension may run at most for as long as the child meets the requirements of Section 32 EStG.
This point deserves particular attention when emigrating with a family: entitlement to child benefit generally depends on tax liability in Germany and may lapse on moving abroad. What this means for the family is covered in the article on child benefit after emigration. Whether and how such a loss affects an agreed survivors’ pension for children is not expressly regulated by law and should be clarified with the provider and an adviser before moving abroad.
Protection from Seizure and Insolvency
The strict restrictions on disposal have a downside that is often sold as an advantage. Under Section 851c (1) of the Code of Civil Procedure (Zivilprozessordnung, ZPO), pension payments from such contracts may only be seized in the same way as income from work. In the accumulation phase, under Section 851c (2) ZPO, contributions are protected only up to certain annual and overall limits (currently EUR 6,000 per year from the age of 18 until the completion of the 27th year of life, EUR 7,000 per year from the age of 28 until the completion of the 67th year of life and EUR 340,000 in total, with a first adjustment on 1 July 2027). If the surrender value exceeds these limits, the excess is only partially protected.
Dr. Fiala has repeatedly pointed out that the widespread assumption of complete protection from seizure is not correct; more on this in the article Basic pensions: seizable or not? (in German). For emigrants: German protection from seizure is governed by German enforcement law and concerns access by German creditors to the claim against the German insurer. How foreign creditors or foreign insolvency proceedings deal with the contract also depends on the law of the destination country.
Mistakes in Practice When Moving Abroad with a Basic Pension
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| Mistake | Consequence | Better |
|---|---|---|
| Continuing to pay contributions unchanged after moving abroad without checking the tax effect | No special expense deduction, but later taxation of the pension | Consider a paid-up policy or an application under Section 1 (3) EStG |
| Giving notice of cancellation to the insurer in the expectation of a payout | No payout, the contract is made paid-up | Decide before moving abroad between continuation, paid-up policy and change of provider |
| Paying a large one-off contribution shortly after moving abroad | Deduction may be lost | Clarify timing before moving abroad and tax liability |
| Not reviewing the survivors’ provisions | Capital may be lost on death | Check contract content and beneficiaries before moving abroad |
| Not informing the provider of the new address and bank details | Delays in pension payment and in the pension payment notification (Rentenbezugsmitteilung) | Notify address, tax ID and bank account in good time |
| Not checking the double taxation agreement | Double taxation of the pension | Check the agreement before the pension begins, prove tax residence |
Anyone who keeps other ties to Germany alongside the basic pension, such as real estate or investments, should coordinate their overall planning. A tax representative in Germany can make communication with the tax office easier.
Example
Example: Fenja Muster, a self-employed woman aged 48, has been paying EUR 12,000 a year into a basic pension since 2014 and moves permanently abroad in July 2027, where she continues her business. Her contract continues; the tax advantages used so far remain unaffected. Contributions she pays up to June 2027 can be taken into account in the assessment for 2027. From 2028, she is no longer subject to unlimited tax liability in Germany; since she earns almost all of her income abroad, Section 1 (3) EStG is not an option either. Further contributions would have no tax effect in Germany. She makes the contract paid-up. From the age of 62, she receives a life annuity, which Germany can in principle tax under Section 49 (1) no. 7 EStG, insofar as the agreement with her state of residence permits this.
Conclusion
Continuing a Rürup contract after emigration is legally possible and, as a rule, does not lead to any clawback of tax advantages. The contract remains in place, the capital remains tied up until the pension begins, and the law does not provide for cancellation with a payout. With the end of unlimited tax liability, however, the special expense deduction for new contributions is regularly lost, while the later pension may remain subject to limited tax liability in Germany, without a basic tax-free allowance and subject to the double taxation agreement. Anyone who checks before moving abroad whether contributions should continue or be suspended, whether Section 1 (3) EStG is an option and how survivors are provided for avoids the typical mistakes. Where the legal position is unclear, a binding ruling from the tax office under Section 89 (2) AO is advisable before implementation, and coordination with a local adviser is advisable for taxation in the destination country.
Frequently Asked Questions
Do I have to repay the tax advantages of my Rürup pension when I emigrate?
No, as a rule you do not. Unlike the Riester pension, the basic pension has no allowances and no clawback rule in the event of emigration. The special expense deduction claimed in earlier years remains in place.
Can I cancel my Rürup contract before emigrating and have it paid out?
In principle, no. The right of cancellation is excluded for certified basic pension contracts under Section 168 (3) no. 1 VVG, and the entitlements cannot be converted into a lump sum under Section 10 (1) no. 2 sentence 2 EStG. A paid-up policy or a switch to another certified basic pension contract is possible. In individual cases, unwinding the contract by other means may come into consideration, for example by rescission or revocation.
Can I continue to deduct contributions for tax purposes after moving abroad?
Only if you remain subject to unlimited tax liability in Germany or are treated as having unlimited tax liability on application under Section 1 (3) EStG. Where there is merely limited tax liability, Section 50 (1) sentence 4 EStG excludes the deduction.
Will my Rürup pension be taxed in Germany if I live abroad?
Payments from a German insurer are German income under Section 49 (1) no. 7 EStG. Whether Germany may actually tax them is determined by the double taxation agreement with your state of residence. Where only such income is received, the Neubrandenburg tax office is usually responsible.
What happens to the capital if I die abroad?
The entitlements are not inheritable. Only an agreed survivors’ pension for spouses, registered civil partners or children entitled to child benefit is paid out. Whether the requirements for children continue to be met after moving abroad should be clarified in advance.
Attorney Dr. Johannes Fiala and the Munich-based firm, which focuses on international succession law, tax law and asset protection, advise emigrants with basic pensions on what happens to their Rürup contract when they move abroad, from continuation or a paid-up policy to the special expense deduction and the taxation of the pension abroad. Dr. Fiala has published extensively on questions of emigration and asset protection. Please get in touch with the firm without obligation to discuss your individual situation in an initial consultation.
