Can contributions to foreign insurance policies be taken into account in the tax return?

Yes, contributions to foreign insurance can also be deducted in the German tax return, but only under certain conditions.

1. Contributions to health and pension insurance

Contributions to foreign statutory pension insurance can be considered as pension expenses (§ 10 para. 2 no. 2c EStG). Contributions to other foreign insurance are also deductible if:

• they fall under the maximum amount for pension expenses, and
• the insurer is based in an EU/EEA country or is authorised to operate in Germany (§ 10 para. 2 no. 2a EStG).

2. Deduction as special expenses: restrictions

Foreign social security contributions are not deductible if they are related to tax-free foreign income, e.g. when applying the progression clause (§ 10 para. 2 no. 1 EStG).

3. Special regulation since 2019

Since 2019, contributions to pension, health, nursing care, and unemployment insurance can also be deducted if:

• the income from employment is earned in an EU/EEA country,
• this income is tax-free in Germany (double taxation agreement), and
• the foreign state does not allow the pension expenses to be taken into account for tax purposes (§ 10 para. 1 EStG).

4. Current case law

The Federal Fiscal Court (BFH) has repeatedly ruled in favour of taxpayers:

• Contributions to nursing care insurance in Luxembourg and
• Contributions to basic health insurance in the Netherlands

may be deducted as special expenses if no tax deduction is possible abroad (including BFH, X R 28/20, X R 13/20).

This does not apply to income from third countries such as China, Brazil, or India (BFH, X R 25/21 of 14.12.2022).

Note

Regularly inform yourself about current legal changes and rulings. If in doubt, tax advice is recommended.