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Does the transfer of a pension commitment against a settlement payment result in taxable wages?
No. According to the BFH ruling of 18.08.2016 (Az. VI R 18/13), the payment of a settlement amount in the context of an assumption of debt does not result in a wage inflow to the employee. Reasoning: The employee's claim to future pension payments is not economically fulfilled; only the debtor of the pension obligation changes.
As of: November 2016
When does granting a pension commitment result in taxable wages?
According to settled BFH case law, the mere granting of a pension commitment does not yet constitute an inflow of wages. An inflow only occurs when pension benefits are actually paid out or when the employee directly receives an economic benefit.
As of: November 2016
Does the BFH ruling deviate from prior case law?
Yes, the ruling of 18 August 2016 (VI R 18/13) deviates from the earlier BFH decision of 12 April 2007 (VI R 6/03). The new case law is more employee-friendly and creates greater structuring flexibility when transferring pension commitments.
As of: November 2016
What condition must be met so that no inflow of wages occurs?
The employee must not have an option to alternatively receive the buy-out amount as a payment to themselves. Only if the payment flows exclusively between the former and the new debtor (e.g. two GmbHs) does the transaction remain neutral for wage tax purposes.
As of: November 2016
What is the practical significance of the BFH ruling for company sales?
The ruling considerably facilitates the transfer of pension commitments in share deals. Purchasers who do not wish to assume an existing pension commitment can transfer it to another company (e.g., a newly established GmbH of the seller) against a settlement amount without triggering wage tax for the beneficiary employee.
As of: November 2016