Important: The deductibility of pensions or long-term financial burdens depends on the date of the relevant contract. The Annual Tax Act 2008 (Jahressteuergesetz) abandons the differentiation between pensions and long-term financial burdens. The long-term provisions paid are now always recognised as "long-term financial burdenы". This means there is no need to determine the income share of life annuities, as was previously the case. This means:

• The person paying may deduct the long-term provision payments in full as special expenses (sect. 10, para. 1, no. 1a of the Income Tax Act (EStG)).
• The person receiving the long-term provision payments must specify the payments in full as "Other income" for taxation purposes (sect. 22, no. 1a of the Income Tax Act (EStG)).