Transition allowance
May 3, 2022 | 40,00 EUR | answered by Steuerberater Bernd Thomas
Hello Mr. Thomas,
since 1.2.2019 I have been receiving a company pension of EUR 213.18. (Total for 2019: EUR 2,346.00)
Additionally, from Feb 2019 to July 2019, I received a transitional allowance TA of 6 times EUR 2,097.38.
In my 2019 tax return, I entered the transitional allowance as income replacement payments subject to progression clause in line 38 EUR 12,584.00. Was this correct?
The tax office calculated as follows:
Income from employment not subject to self-employment Gross salary EUR 14,930.00
Deduct allowances for pension payments EUR 1,573.00
Deduct advertising costs for pension payments EUR 102.00
Deduct employee lump sum EUR 1.00
Income: EUR 13,254.00
Was the tax office's calculation correct?
Kind regards,
Manfred Ulrich
Dear Mr. Ulrich,
I am happy to respond to your inquiry based on the information provided during an initial consultation on frag-einen.com. The response is based on the factual information you have provided. Missing or incorrect information may affect the legal outcome.
The transitional allowance as a benefit of company pension schemes is not subject to the progression clause, but is to be taxed regularly. If the payment is made by the employer, without the entitlement being acquired through personal contributions, it is therefore to be taxed as consideration for previously provided work and as a retirement benefit.
For retirement benefits, depending on the year in which the benefits commence, the retirement allowance and the additional allowance must be calculated (for retirement benefits starting in 2019, 17.6%, up to €1,320, additional allowance for retirement allowance €396, see § 19 para. 2 sentence 3 EStG).
Whether the calculation is correct should be assessed based on the values provided by the employer, which can be found in the annual income tax certificate(s).
A lump sum of €102 should be deducted as advertising costs for retirement benefits and pensions, higher advertising costs only upon proof.
Overall, the values do not appear implausible.
Due to the specified fee, the level of detail must be limited, so it may be necessary to consult the sources and references mentioned (German laws can be accessed at www.gesetze-im-internet.de).
Best regards,
Bernd Thomas
Tax advisor
Information according to DL-InfoV: Tax advisor Dipl.-Kaufmann (FH) Bernd Thomas, Tax advisor, Franlinstraße 15, 30177 Hannover, member of the Tax Advisor Chamber of Lower Saxony, membership number 146580, professional liability insurance with R+V Allgemeine Versicherung AG, Mittlerer Pfad 24, 70499 Stuttgart, insurance sum: €250,000 for each individual claim; annual maximum benefit: €1,000,000 (for all damages in one insurance year); the professional regulations apply, in particular the Tax Advisory Act (StBerG), implementing regulations for the Tax Advisory Act (DVStB), professional code (BOStB), Tax Advisor Compensation Ordinance (StBVV) (regulations can be viewed at: https://www.berufsrecht-handbuch.de/, http://www.gesetze-im-internet.de/stberg, www.gesetze-im-internet.de/stbvv/), the professional title of tax advisor was awarded in the Federal Republic of Germany.
