Tax Implications for Germans Contributing to Turkish Social Security (SGK)

Recent rulings from the Bavarian State Tax Office clarify the tax treatment of voluntary contributions to the Turkish social security system (SGK) made by German citizens. This guidance is crucial for individuals seeking to understand how these contributions impact their German tax obligations.

Understanding SGK Contributions

Turkish citizens residing in Germany may, under specific circumstances, choose to make voluntary pension insurance contributions to the Turkish social insurance system (SGK). These contributions are calculated based on Turkish social insurance parameters, encompassing both old-age insurance (20% of the assessment basis) and health insurance (12% of the assessment basis). The SGK certificate does not itemize these contributions separately, presenting a single total amount.

Allocation of Contributions for Tax Purposes

Previously, the allocation between pension and health insurance components was subject to interpretation. However, a ruling by the Munich Fiscal Court on October 22, 2025 (15 K 2422/23) has established a clear method for dividing the total contribution amount. The Bavarian State Tax Office (BayLfSt) has confirmed this ruling, allowing for the resumption of processing objections.

The correct allocation is now:

• Pension Insurance: 62.5% (20/32)
• Health Insurance: 37.5% (12/32)

Tax Deductibility in Germany

The tax deductibility of these contributions differs based on the component:

• Pension Insurance Portion: This portion can be claimed as special expenses (Sonderausgaben) under Section 10 Paragraph 1 No. 2 Letter a) in conjunction with Section 10 Paragraph 3 of the German Income Tax Act (EStG).
• Health Insurance Portion: This portion falls under other pension expenses (Section 10 Paragraph 1 No. 3a EStG) and is subject to the maximum special expense allowance of EUR 2,800 or EUR 1,900, as defined in Section 10 Paragraph 4 EStG.

If existing pension expenses (basic health/pension insurance) already exceed these maximum limits, a further deduction for the SGK health insurance portion is not possible (Section 10 Paragraph 4 Sentence 4 EStG).

Source

Unpaid Taxes and SGK in Turkey: What Foreigners Must Know

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