Special regulations for compensation payments
Official regulation concerning taxation of former forced labourers
According to information from the Federal Ministry of Finance of the Federal Republic of Germany, social security pensions paid by German statutory pension insurance scheme on the basis of contribution periods payments to former forced labourers will not be treated as income which is subject to taxation in Germany.
Social security pensions paid by German statutory pension insurance scheme on the basis of contribution periods for employment in a ghetto are also exempted from taxation.
Both ongoing (monthly) pension payments and retroactive payments for years past which have been made recently as the result of several decisions taken by German social courts will be exempt from taxation.
Therefore, pensioners who receive a German social insurance pension exclusively based on employment in a ghetto or as former forced labourer do not need to file any tax declaration. This also applies if the Neubrandenburg Tax Office sent out a request to file a tax declaration.
However, in cases where the German social insurance pension is also based on periods of employment outside a ghetto or where there it adds to income from other sources in Germany and where Germany has the right to levy taxes pursuant to the agreement on the avoidance of double taxation, the obligation to pay taxes in Germany for the income from these pensions and/or other income remains unchanged. Therefore a tax declaration is to be submitted in such cases.
What can I do if I think I am exempt from taxation in Germany because I only receive a compensation pension for time in a ghetto or concentration camp?
If you received a letter from the Neubrandenburg Tax Office and think that you might be tax exempt from pension taxation in Germany because you only receive pension payments based on work in a ghetto or time spent in a concentration camp, we recommend that you contact the Neubrandenburg Tax Office by registered mail.
You can write them in English or German, for example:
"On the basis of the "Official declaration concerning taxation of employment in a ghetto" by the German Federal Ministry of Finance, obtained at the German Consulate General in Toronto, I assume that I am not required to file a tax declaration with your office".
In German, this reads:
"Ich gehe davon aus, dass ich, nach Maßgabe der über das Generalkonsulat Toronto erhaltenen Auskunft des Bundesministeriums der Finanzen zur Nichtbesteuerung von Ghettorenten nicht zur Abgabe einer Steuererklärung verpflichtet bin."