The one-off capital payment can be taxed according to the half-income method. The name already suggests it: The half-income method means that 50 percent of the income portion is tax-free. This procedure can be applied both at the contractually agreed time and when the contract is terminated.
However, two conditions must be met for the profit from the private pension insurance to be taxed according to the half-income method:
The pensioner must be at least 62 years old
The insurance contract must have a term of at least twelve years.
Example
Anyone who has paid 60,000€ into their private pension insurance during the contribution phase and receives a one-off payment of 80,000€ during the payout phase has made a profit of 20,000€.
If the criteria are met and the half-income method can be applied, only half of the amount, i.e. 10,000€, has to be taxed. If the pensioner has a personal tax rate of 20 percent, they must pay a tax of 2,000€.