Splitting contributions in foreign social insurance

In the letter of 13.11.2020, the Federal Ministry of Finance has published the apportionment scales for 2021 for the uniform social security contributions paid by employees into a foreign social security scheme. The adjusted percentages apply to the countries Belgium, Latvia, Malta, Norway. Portugal, Ireland, Spain and Cyprus.

Global contributions paid to a foreign social security institution can be claimed as pension expenses. In the case of global contributions, no distinction is made between the individual branches of social insurance (health, pension, unemployment insurance). In order to be able to allocate this global contribution to the deductions under Section 10 of the German Income Tax Act (EStG) that apply in this country, the Federal Ministry of Finance (BMF) issues annual country-specific allocation standards. Accordingly, the global contribution is distributed on a percentage basis among the following deductible items:

– pension contributions according to § 10 para. 1 no. 2 letter a) EStG

– basic health insurance contributions and compulsory nursing care insurance contributions without the sickness benefit component in accordance with Section 10 (1) no. 3 sentence 1 letters a and b EStG

– other pension expenses pursuant to Section 10 (1) No. 3a EStG

The Federal Ministry of Finance indicates that the corresponding apportionment regarding pension expenses has to be made by the employer also in case of issuing wage statements and special wage tax statements for the calendar year 2021.

The apportionment of global contributions paid to social security institutions in countries outside Europe must be made according to the circumstances of the individual case. The same also applies to the United Kingdom.


BMF, Schreiben vom 13.11.2020, Az. IV C 3 – S 2221/20/10002 :002.

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