Handelsblatt Exclusive

Germany's Voodoo Pension Tax

European Finance Ministers Attend Eurogroup Meeting
Companies are paying too much due to dated calculations.
  • Why it matters

    Why it matters

    A study argues German companies are paying more in tax than they should, which jeopardizes jobs and their financial stability.

  • Facts

    Facts

    • A study by the Cologne Institute for Economic Research found that companies paid €20 billion to €25 billion more in pension taxes than they should have between 2008 and 2014.
    • This is because the German Finance Ministry calculates tax liability on the assumption that companies are earning 6 percent interest on their pension reserves.
    • Market interest rates are lower due to the European Central Bank’s low-interest policy.
  • Audio

    Audio

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German companies are paying more than they should in taxes on employee pension obligations, according to a study obtained exclusively by Handelsblatt.

The Cologne Institute for Economic Research found that companies paid between €20 billion and €25 billion ($22 billion and $27 billion) more in taxes than they should have between 2008 and 2014.

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