Pension lump sum calculation

[silty2]

Hey all, or those still around, hello and thanks for thinking of including me as one of the few.

I was going to save this information as I did other useful stuff before TTGermany's last gurgle down the drain, but alas, did not, and googling for it is not helpful.

So I just got off the blower with my Krankenkasse, who tell me that if I accept a lump sum from a Betriebsrente from my home country of Canada, the Krankenkasse will:

Divide the sum by 120, and charge me the going percentage for 120 months.

Calculate the sum on the gross amount before my Canada deducts a witholding tax of 15%

Does that sound right?

Cheers

[HEM]

Does that sound right?

Sadly so - thats what they did to me when calculating the rates for my wife (halved - I'm privately insured & thus my charges are independent of income).

[silty2]

Yeah, and I just found out that if I want the lump sum, Canada will deduct 25% as a withholding tax. Regular payments are withheld at 15%.

I guess there's no way to claim that back from the Finanzamt, something like a Foreign Tax Credit?

[MadAxeMurderer]

Don't double taxation treaties ensure you only pay the highest tax between both countries not the sum of the tax expectations of both countries

[HEM]

What the OP wrote about was not taxation in Germany - its what his health insurance will base their charges on.

German taxation is a separate matter.

[John Gunn]

Evening, HEM!
I hope you are well!
John ( Still alive )!

[PandaMunich]

Yeah, and I just found out that if I want the lump sum, Canada will deduct 25% as a withholding tax. Regular payments are withheld at 15%.

I guess there's no way to claim that back from the Finanzamt, something like a Foreign Tax Credit?

There is.
Pensions are dealt with in article 18 of the double taxation agreement (DTA) between Germany and Canada: https://www.bundesfinanzministerium.de/ ... onFile&v=3
And in article 23 (2) b) ee) of the DTA, it says that Germany has to give you a tax credit for the Canadian income tax that you had already paid on your Canadian pension.

[silty2]

Well, that is good to learn, Panda - thanks for that! I'm now going to just go for the monthly, which is a 15% withholding tax. Maybe I'll get to outlive the lump sum amount, actuaries be damned.

This all has to get reported to the Krankenkasse, and they take their cut. Given exchange rate fluctuations, there will have to be a re-balancing of what I pay to them. Do you know how often I'll have to do that?

[PandaMunich]

This all has to get reported to the Krankenkasse, and they take their cut. Given exchange rate fluctuations, there will have to be a re-balancing of what I pay to them. Do you know how often I'll have to do that?

Every year.