Since 2008, the double-taxation Agreement with the U.S. no longer provides for taxation in the source state. Consequently, the pensioner’s country of residence has had the exclusive right of taxation since 2008. Therefore, as of the 2008 assessment period, it is no longer necessary for persons living in the U.S. who exclusively draw retirement income from Germany within the meaning of § 22, No. 1, Sentence 3a of the German Income Tax Act or § 22, No. 5, Sentence 1 of the German Income Tax Act (in particular pensions paid out of the German Pension Insurance) to file a tax return in Germany (starting in 2009). It must be pointed out, however, that, although the Finance Office is currently forgoing the filing of tax returns, it is generally entitled to require the filing. If a taxpayer receives such a request, he or she is obligated to submit a tax return.
For questions please contact (please enclose the letter you received on your pension, a passport copy and your green card)
Neustrelitzer Str. 120
Tel.: 01149 395 44222 47000
The Double Taxation Agreement between the Federal Republic of Germany and the United States of Americastates in Article 18, 5:
“Social security benefits paid under the social security legislation of a Contracting State and other public pensions (not dealt with in Article 19 (Government Service) paid by a Contracting State to a resident of the other Contracting State shall be taxable only in that other Contracting State. In applying the preceding sentence, that other Contracting State shall treat such benefit or pension as though it were a social security benefit paid under the social security legislation of that other Contracting State.”