Banka: Germans appeal decision on pension tax Cdns pay

Court action to dispute taxes on the German Social Security Pension is under appeal by German tax authorities.

A Canadian has taken court action in Germany to dispute the payment of taxes to the German government on the German Social Security Pension received by Germans living in Canada.

The German Tax Court ruled on Jan. 13, 2016 that the Canada-Germany Tax agreement does not allow Germany to tax the German Social Security Pension benefits received by residents of Canada. The case reference is Finanzgericht Mecklenburg-Vorpommern, Urteile vom 13, Januar 2016, 1 K 453/13 und 1 K 4/15.

Currently this ruling is under appeal by the tax authorities in Germany and until it is finally resolved, the German government will continue to assess taxes on the German Social Security Benefits.

So what does this mean for you? It is up to you whether or not you want to pay the tax assessed by the German government or wait for the final result. But be warned that if the decision is overturned, you could face some hefty fines and interest on the tax that you then owe.

If the decision is upheld, you will have the opportunity to file a notice of objection in Germany on your assessment. There is no prescribed form for this so you will need to draft a letter in German stating the reason for the objection and include the case reference (above) as well as a copy of your notice of assessment received from the German government.

Unfortunately, you only have one month after the date of the German assessment to file the notice of objection, and you will not be able to file for any previous years, just the current year. So, if you have recently made a payment, I would suggest that a notice of objection be filed immediately. Note that the tax continues to be due to the German government until your objection is resolved.

On the Canadian side, you are still required to include the pension received in your income on your T1 return because, as Canadians, we are taxed on world wide income and then receive foreign tax credits for any taxes paid in other countries. There is a percentage of the pension that is non-taxable depending on the year that you started to receive the pension.

If you have paid the tax to the German government for a prior year, and you have Canadian taxable income in that year, you can adjust your Canadian tax return for that tax year to receive a foreign tax credit for the tax paid to Germany.

The Canada Revenue website has more information on this issue and how to report the pension in Germany at ‘Additional information regarding the change to the taxation of German social security pensions.’ This website has a link to the German Taxation website for even further information.

Just Posted

City of Revelstoke passes fire services bylaw

We are doing our end of the paperwork to be ready just in case this comes to fruition: mayor

Sagmoen case adjourned, again

Small, yet mighty, rally again on Vernon courthouse steps

Suspect in October standoff killed himself: Revelstoke RCMP

Mohammadali Darabi, suspect in Calgary homicide of roommate, was stopped in Revelstoke

Revy. Set. Grow! to build local food system

Weekend of farm-focused events will be hosted in Revelstoke Jan 13-14

CP Holiday Train to stop in Revelstoke Thursday

Event takes place in the afternoon with Alan Doyle and The Beautiful Band performing

VIDEO: Average Canadian food bill to rise by $348 in 2018

Atlantic Canada and B.C. will see the most increases for consumers

Victoria gets approval for supervised consumption site

It is scheduled to open in the spring/summer of 2018 and will be the first permanent facility on Vancouver Island

Bear spray used in tenant dispute

Salmon Arm RCMP responding to Tappen home invasion find occupants sprayed in repllent

Home services, rental rates top concerns: B.C. seniors’ watchdog

Premier John Horgan pledges action on rental housing in 2018

‘Game-changing’ B.C.-born technology tests brain vital signs

B.C. neuroscientist describes the tech as ‘the world’s first objective physiological yard stick for brain function’

5-year anniversary of Sandy Hook shooting

When just saying ‘I’m from Newtown’ can be a cross to bear

Disney buying part of 21st Century Fox in $52.4B deal

Disney is buying a large part of the Murdoch family’s 21st Century Fox for about $52.4 billion

Bountiful polygamist believed he couldn’t be prosecuted: lawyer

Winston Blackmore’s lawyer says Blackmore did not believe he could be prosecuted

Woman charged after altercation injured baby in Toronto

Charges have been laid after a four-month-old baby girl was critically injured in Toronto

Most Read