Important: The deductibility of annuities and long-term financial burdens depends on the date of the contract. Since 2008, the distinction between long-term financial burdens and annuities has been abolished. Annuities are now always "long-term financial burdens". This means that the determination of the share of income previously required for life annuities can be waived. This means that

• The payer may deduct the benefit payments in full as special expenses (sect. 10 para. 1a no. 2 of the Income Tax Act (EStG).
• The recipient of the annuity must pay tax on the full amount of the benefits received as "other income" (section 22 no. 1a of the Income Tax Act (EStG).