Article 17 Pensions, Annuities and Social Security Payments

Transcription

1 Article 17 Pensions, Annuities and Social Security Payments

2 Article 17 Pensions, Annuities and Social Security Payments (1) Resident State taxation of the above mentioned payments (2) Source State taxation : Notwithstanding the provisions of paragraph 1, a pension or other similar remuneration, as well as annuity or social security pension, may also be taxed in the Contracting State from which it is derived, in accordance with the law of that state if their total gross amount exceeds in any calendar year the sum of 15,000 euro. Pension or other similar remuneration Refers to benefits from Basic pension insurance such as - social insurance pensions and - pension schemes provided by professional associations Occupational pension insurance such as - direct promises and relief funds (taxable as employment income) - pension schemes, pension funds direct insurance policies (taxation as other income) Annuities Personal pension insurance such as private pension plans, called Riester-Rente or Rürup-Rente annuities in relation with the purchase of assets (3) lump sum payments. (4) restitution payments..

3 Article 17 Pensions, Annuities and Social Security Payments (2) Source State taxation : Notwithstanding the provisions of paragraph 1, a pension or other similar remuneration, as well as annuity or social security pension, may also be taxed in the Contracting State from which it is derived, in accordance with the law of that state if their total gross amount exceeds in any calendar year the sum of 15,000 euro. (5) Source rule: A pension or other similar remuneration or annuity is deemed to be derived from a Contracting State insofar as the contributions or payments associated with the pension or other similar remuneration or annuity, or the entitlements received from them qualified for tax relief in that State. (irrespective of the transfer of a pension.) Tax relief Of contributions which a) did not form part of the taxable income from employment (like the tax exemption in 3 Nr German Income Tax Act), or b) were tax-deductible (for ex. by the special deduction provision in 10 German Income Tax Act), or c) were tax-relieved in some other way (like tax grants in 92 et seqq. Income Tax Act). Irrespective of the residence of the pension fund This means: If the fund is a Pan European Fund resident in a third country or the pension rights have been transferred to a fund in a third country (so called portability of pension rights).

4 Granting of the German split rate XVI. With reference to Article 24 1) 1 The limitations of the second sentence of subsection (3) of section 1 in conjunction with subsection (2) of section 1a of the German Income Tax Act shall not be applied to spouses resident in the Netherlands. First sentence: married couples resident in the NL or Germany are treated equally (not required inter alia, to realise at least 90% of the family income in Germany). 2 This shall presuppose that the spouse liable to tax in the Federal Republic of Germany personally fulfils the preconditions of subsection (3) of section 1 of the Income Tax Act. Second sentence: the spouse liable to tax in Germany, inter alia, should generate 90% of his/her own income in Germany. 2)

5 New attribution of taxation rights Capital gains concerning real estate companies Article 13 (1) (2) Gains derived by a resident of a Contracting State from the alienation of shares in a company, or comparable interests, not listed in a recognized stock exchange, deriving more than 75 per cent of their value directly or indirectly from immovable property, other than immovable property in which that company or the holders of those interests carry on their business situated in the other Contracting State may be taxed in that other Contracting State. However, such gains shall be taxable only in the firstmentioned State where: a) the resident owned less than 50 per cent of the shares or other comparable interests prior to the first alienation or b) the gains are derived in the course of a corporate reorganisation, amalgamation, division or similar transaction...

6 New attribution of taxation rights Exit tax for individuals Article 13. (6) Where an individual was a resident of a Contracting State and has become a resident of the other Contracting State, the provisions of paragraph 5 shall not prevent the first-mentioned State from taxing under its domestic law the capital appreciation of shares, profit sharing certificates, call options and usufruct on shares and profit sharing certificates in and debt-claims on a company for the period of residency of that individual in the first-mentioned State. In such case, the appreciation of capital taxed in the first-mentioned State shall not be included in the tax base when determining the subsequent appreciation of capital by the other State.

7 New attribution of taxation rights Director fees Article 15 (1) Directors' fees and other remuneration derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State. (2) The term member of the board of directors includes both persons who are charged with the general management of the company and persons who are charged with the supervision thereof.