How is foreign pension income taxed in Germany?

Whether foreign pension income is taxable in Germany depends on the type of pension and the applicable double tax agreement (DBA). Under most German tax treaties, private pensions (including foreign statutory pension equivalents) are taxable only in the country of residence. If you live in Germany and receive a pension from a foreign country's state pension system, Germany generally has the taxing right and the pension is included in your German tax return.

Government pensions paid for public service (e.g. former civil servants of a foreign government) are typically taxable only in the source country, not in Germany, even if you are a German resident. This distinction is significant for people receiving pensions from the UK's NHS pension scheme, US civil service pensions, or similar public-sector pensions abroad.

The taxable portion of foreign pensions follows German rules on pension taxation. Since 2005, German pension income is being gradually phased into full taxation. The taxable percentage depends on the year the pension started: for pensions starting in 2024, 84% is taxable; the percentage increases by 1% per year until 100% is reached for pensions starting from 2058 onwards. If the applicable DBA provides that the foreign pension is exempt in Germany, the pension is still considered under the Progressionsvorbehalt and influences the rate applied to other German taxable income. Currency conversion uses the exchange rate at the time of payment.

This is general information only, not professional tax advice. Consult a qualified tax professional for your specific situation.