German Retirees Face €4.1 Billion Tax Increase in 2025
A projected 3.5% pension hike will push 73,000 more retirees into taxation, while systemic reforms continue to shift toward full income tax on pensions.
- The German government expects to collect €62.7 billion in taxes from retirees in 2025, up from €58.6 billion in 2024, marking a €4.1 billion increase.
- Approximately 73,000 additional retirees will become subject to income tax in 2025 due to rising pensions and gradual tax rule adjustments.
- Pensions are anticipated to rise by 3.5% in July 2025, providing retirees with higher net income despite inflation being lower than the increase.
- The ongoing transition to a system of deferred taxation will see newly retired individuals in 2025 required to declare 83.5% of their pension as taxable income.
- Critics, including BSW leader Sahra Wagenknecht, have called for reforms, advocating for tax exemptions on pensions up to €2,000 per month.
Sächsische Zeitung 
Frankfurter Allgemeine Zeitung 
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