Special expenses deduction in the Altersvorsorgedepot: €1,800 plus allowance entitlement

What is the special expenses deduction?

A tax relief under which your retirement provision contributions reduce your taxable income. Governed by § 10a EStG and similar to the previous Riester model. Unlike the Rürup pension, where a multiple of this is deductible, the subsidized own contribution in the Altersvorsorgedepot is capped at €1,800. Together with the allowance entitlement, this gives the assessment base.

How does the special expenses deduction work?

1. You pay contributions into the Altersvorsorgedepot (e.g. €1,800 a year).
2. In your income tax return you enter these contributions in Anlage AV during the calendar year.
3. The tax office deducts the contributions from your taxable income.
4. The tax assessment also documents the more-favourable-treatment check.

What is the more-favourable-treatment check?

The tax office automatically checks two options:

• Option A: You keep the state allowances.
• Option B: You use the special expenses deduction (tax saving minus allowances already received).

You automatically get whichever option is worth more, without having to do anything. The allowances stay in the securities account in either case.

Sample calculation: how much do you really save?

*Single, no children, €1,800 own contribution. The assessment base of €2,340 is made up of €1,800 plus the €540 allowance entitlement. Excluding solidarity surcharge and church tax; the more-favourable-treatment check automatically selects the better model.

Why is the special expenses deduction worth it?

For Higher earners the tax deduction is often far more attractive than the allowance. At a marginal tax rate of 42%, the assessment base of €2,340 produces around €983 in tax savings, far more than the maximum basic allowance of €540. Very high incomes therefore benefit disproportionately.

Real-life examples of the tax saving