(2025) What are permanent financial burdens?

Perpetual burdens are pension payments that a taxpayer makes to another person on a long-term basis and due to a legal obligation. These are regular payments, the duration of which, in the case of a pension payment, is linked to the lifetime of one or more persons. Perpetual burdens must be provided for at least ten years.

Unlike pension commitments, perpetual burdens can be adjusted at any time. They are therefore variable in amount and depend on the financial circumstances of the payer and the recipient. This may be the case, for example, if the financial situation of the contracting parties changes.

Perpetual burdens can be in cash or in kind. An example of in-kind payments is the so-called "born" perpetual burdens. This includes, for example, the obligation to provide meals for a person.

Abbreviated perpetual burdens can also be agreed if they end either with the death of the person or at the latest after a certain period.

Since 2008, no distinction has been made between perpetual burdens and annuities for tax purposes. Pension payments are now always considered "perpetual burdens". This means that the calculation of the yield share required for life annuities is no longer necessary.