The article describes the main types of taxes in Germany. Find out what taxes individuals pay in Germany, whether there is a progressive tax in Germany and what percentage of taxes people with high incomes pay to the treasury.
The principles underlying the functioning of the modern German tax system are enshrined in the constitution of this country.
The Basic Law states the following provisions governing taxes and taxation in Germany:
- principle of taxation based on solvency;
- principle of equality in taxation;
- principle of legality of taxation;
- the principle of social orientation of state activities.
The transparency of tax legislation also plays an important role: according to this principle, every interested party should be provided with the opportunity to find out what taxes exist in Germany at a given time and what the tax burden consists of.
The obligation to pay a particular tax in Germany occurs after receiving written notice of the need to pay it by mail or electronically. The exact amount of taxes in Germany and the method of their calculation are determined by the Finanzamt, an organization that performs the functions of the tax service, based on the data of the previously submitted tax return.
Germany is a country with a three-tier budget system, which includes the general budget at the federal level, the budgets of the 16 federal states and “free cities” and the budgets of the communities, also called communes.
The basic rules concerning the area of taxes and taxation in Germany are regulated by the provisions of the Tax Code (Abgabenordnung) of that country. The application and payment of specific types of taxes are described in separate laws where appropriate. In total, the country levies 45 different types of taxes: thus, in addition to several types of business taxes, in Germany there is a church tax (however, a person can refuse to pay the latter - this possibility is provided for legally).
Before we talk in detail about how taxes are paid in Germany, we note that the percentage of taxes in Germany, that is, how much a local taxpayer needs to pay, and what rates apply in each specific case, depends on many factors, which is why there is no such thing as “ “average taxes” simply do not exist in Germany, just as there are no average values.
Property taxes
The calculation of real estate tax (Grundsteuer) depends on three factors determined by municipalities and local tax offices: the value of the property unit, the tax base and the tax rate.
In Germany there are two types of property taxes: type A tax (for agricultural and forestry properties) and type B tax (for all other types of properties).
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Property valuation
To calculate the property tax of type B, the tax office first determines the so-called value of the real estate unit, on the basis of which the tax itself is calculated. The calculation of the cost of a real estate unit is carried out in accordance with the standards of 1935 (for East Germany) or 1964 (for West Germany). Since property prices have changed significantly since then, the cost of a property unit is often lower than market values.
The unit value of an undeveloped piece of land is relatively easy to determine. Its area is multiplied by the value corresponding to its value for 1935 or 1964. With built-up areas the situation is more complicated. To determine their value, the tax service uses the capitalized profit method or the cost method of real estate valuation.
The capitalized earnings method generally applies to the valuation of one- and two-family homes, condominiums, and mixed-use properties. During the calculation, the potential pre-tax rent for a given property in 1935 or 1964 is multiplied by a special multiplier. This takes into account factors that affect the cost, such as the area and furnishings of the house.
The costly method of real estate valuation is justified in cases where the amount of the annual rent without deduction of taxes for 1935 or 1964 cannot be determined. In particular, this applies to those objects that were previously classified as luxury real estate. This calculation method always applies to single-family houses located in the former East Berlin, but also to particularly high-quality properties. The cost-based method of real estate valuation takes into account the cost of the land plot, the building itself, as well as external infrastructure facilities in the local area. The cost of the building is calculated based on production costs as of January 1, 1935 or 1964, respectively.
A special procedure exists for rental residential properties located in the new states of Germany, for which it is impossible to determine the value as of 1935. In this case, the calculations use the concept of a conditional tax base, calculated based on the size of the residential or usable area of the object.
The tax base
The type of property and unit value of the property determine the second factor: the property tax base. It determines what portion of the value of a real estate unit is subject to tax.
The following gradation applies to the old states of Germany:
- single-family houses cheaper than €38,346.89 – 2.6 ppm (ppm – 1⁄10 percent);
- single-family houses over €38,346.89 – 2.6 ppm for amounts up to €38,346.89 and 3.5 ppm for balances over €38,346.89;
- two-family houses – 3.1 ppm;
- other residential real estate – 3.5 ppm;
- agricultural real estate and forest land - 6 ppm.
In the new states of Germany, values from 5 to 10 ppm are used, depending on many factors, such as the year the facility was built and the number of inhabitants in the territory of a particular municipality. As a rule, in the east of Germany this figure is significantly higher than in the west.
Tax rate
The third factor that is taken into account when calculating the amount of tax is its rate. It is established by each municipality individually. Rates vary greatly depending on the region of Germany - the difference is particularly significant between urban areas and rural areas.
The tax amount may change if the owner of the property changes its area in any way (including demolition of the property). The municipality can also make an independent decision to increase rates.
When selling real estate or land, the amount of taxes in Germany does not change, since the tax is tied to the object, and not to its owner.
Payment of property taxes must always be made by the person who owned the property as of January 1 of the year in which the tax is levied.
However, often the procedure for paying the tax can be privately agreed upon by the seller and buyer of the property and recorded in the purchase and sale agreement for the property, taking into account the date of the transaction.
The law provides for certain cases in which real estate taxes may be reduced or eliminated. In particular, owners of buildings of artistic, historical or scientific value are exempt from this tax due to the high costs of their maintenance.
When renting out residential real estate, the owner can shift the responsibility for paying property taxes to the tenant if the latter agrees to such terms in the lease agreement.
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Inheritance and gift taxes
The taxation of all types of inherited or gifted property, with the exception of works of art and jewelry, which are not subject to inheritance and gift taxes, is regulated by the Inheritance and Gift Tax Act (ErbStG).
The Germans apply the same rules for determining tax rates and deductions to these two taxes. However, some important differences between the procedures of inheritance and donation still exist.
So, for example, in the case of a gift, the tax deduction can be used once every ten years, and in the case of inheritance - only once in connection with the death of the testator.
The tax office is often informed by the bank about the fact of receiving an inheritance. If this does not happen, the heirs must independently contact the tax office within three months from the date of receipt of the inheritance. After which the tax office will request the appropriate tax return from the heir. Typically, tax processing takes several weeks, but sometimes the process can take longer. If notification of the need to pay tax has not been received four years from the date of filing the declaration, the requirement to pay is canceled due to the statute of limitations. For this reason, the waiting period for a response from the tax office never exceeds four years.
The amount of inheritance and gift taxes levied depends on the degree of relationship between the payer and the person who left the inheritance (gift).
There are three tax classes that are eligible for tax deductions appropriate to their status.
Detailed information about deductions for estate and gift taxes can be seen in the following table:
Taxation of legal entities
Taxes in Germany for businesses consist of two basic categories:
- VAT or turnover tax. Withheld from the cost of goods sold and services provided at a standard rate of 19%. For socially significant goods, such as food, a reduced rate of 7% is used. Enterprises are refunded this tax when making export deliveries, and are also compensated for the part of it that is included in production costs: rental payments, expenses for the acquisition and commissioning of fixed assets.
- Income taxes. They consist of two types, which are levied on the federal and local budgets. They were specially delimited to stimulate the development of regions. The national income tax in Germany, which goes to the federal treasury, has a base rate of 15.825%, and its object is the profit of the enterprise received in the country and abroad. Income tax in Germany, paid to local budgets, can have a rate in the range of 15-20% depending on the region in which the company is registered.
In addition to the main taxes, legal entities, along with individuals, also pay the following:
- for the purchase of real estate - a rate of 3.5 to 5%, depending on the cost of the plot or building;
- land - collected into the local budget at a rate of 1.2% from all land plots, including those owned by agricultural companies and forest industry enterprises;
- for real estate - for objects with an estimated value of at least 20 thousand euros at a rate of 0.6% (for individuals the corresponding values are 120 thousand euros and 1%);
- for cars - depends on power and carbon dioxide emissions, so its rate is zero for cars that meet Euro 5 and Euro 6 emission requirements;
- on dividends and interest income from deposits and securities - from individuals the tax is withheld by the bank automatically, and the legal entity pays it at a rate of 26.375% of dividends received when distributing profits (interest income received) in GmbH or AG companies in which the legal entity owns a capital share .
The fiscal burden in Germany is quite high, but the Germans have created many ways to legally reduce the level of tax payments. This opportunity exists for the maximum socialization of the economy, so that taxes do not hinder the development of the economy, but help to fully reveal the capabilities of each person, regardless of his current financial situation.
Tax deductions for heirs:
Data: haus.de
| Tax class | Category of persons | Deduction amount, € |
| I | Spouses, registered civil partners | 500 000 |
| Children (including adopted children and children of the spouse from another marriage) | 400 000 | |
| Grandchildren who inherit instead of the testator's children in the event of the latter's death | 400 000 | |
| Grandchildren (including adopted) | 200 000 | |
| Great-grandchildren and other descendants | 100 000 | |
| Parents and grandparents in case of inheritance | 100 000 | |
| II | Parents and grandparents in case of donation | 20 000 |
| Brothers and sisters (including half-siblings) | 20 000 | |
| Nephews | 20 000 | |
| Stepfathers and stepmothers | 20 000 | |
| Fathers-in-law, mothers-in-law, fathers-in-law, mothers-in-law, sons-in-law, daughters-in-law | 20 000 | |
| Divorced spouses, civil partners who were in a dissolved registered partnership | 20 000 | |
| III | All other acquirers | 20 000 |
Tax rates are applied to the amount received after deduction according to the following scale:
Data: haus.de
| Inheritance amount after deduction, € | Rate for tax class I, % | Rate for tax class II, % | Rate for tax class III, % |
| 75 000 | 7 | 15 | 30 |
| 300 000 | 11 | 20 | 30 |
| 600 000 | 15 | 25 | 30 |
| 6 000 000 | 19 | 30 | 30 |
| 13 000 000 | 23 | 35 | 50 |
| 26 000 000 | 27 | 40 | 50 |
| >26 000 000 | 30 | 43 | 50 |
In case of inheritance by German residents, the spouse or registered partner of the testator can request a pension deduction in the amount of 256,000 euros in addition to those deductions that are due to him by law. At the same time, the testator's children who have not reached the age of 27 will receive a pension deduction in the amount of 10,300 to 52,000 euros, depending on their age. In the event that one of these relatives of the deceased receives an orphan's, dependent's or pension benefits not subject to inheritance tax, the amount of the deduction will be reduced by the amount of the benefits received.
Inheritance tax is one of the mandatory taxes in Germany for individuals paying income tax. A few exceptions are those cases when residential property is inherited by the spouse of the deceased, or children inherit housing from a parent with an area of no more than 200 square meters. The heirs will have to use the resulting property for ten years before they can sell it. Another condition for tax exemption is the fact that the testator himself used the house or apartment before his death.
Tax on ownership of a car or other vehicle
In Germany, they care not only about socially vulnerable sections of the population and animals, but also about safety for the environment. This care is paid to a certain extent by car owners.
Depending on the age of the car, the type and size of its engine, as well as the level of harmful emissions, the amount of transport tax (KFZ-Steuer) is calculated annually.
Cars equipped with high-class environmentally friendly engines are exempt from paying obligations for a period of one to three years. The focus of this fee on preserving the environment led to the appearance of a second, humorous name - the air tax.
You can learn how to calculate it correctly from the material “Vehicle Ownership Tax.”
Income taxes
Personal income tax (Einkommenssteuer) is paid annually and is obligatory for everyone who temporarily resides or permanently resides in Germany and is a resident of Germany. Non-residents pay tax only on income received in Germany. The declarations of employees are sent to the tax office by the employer (in this case, the tax is calculated based on the monthly salary). When calculating the tax amount, tax class, tax deductions for raising children, solidarity surcharge and church tax, unless the taxpayer has opted out, also play a role.
All other taxpayers independently send their tax returns electronically using a special form.
Owners of their own business and representatives of blue-collar professions can determine the amount of taxable income on the basis of an income and expense report or with the help of their company’s accountant.
Taxable income includes:
- income received as a result of employment (gross);
- business income;
- income from agricultural and forestry activities;
- income received as self-employed;
- income received from capital assets;
- rental income.
Taxable income does not include:
- the portion of pension income that is not taxed when the taxpayer reaches age 64;
- the amount of deductions, including tax deductions in connection with raising children;
- allowable losses for previous years;
- special expenses of the taxpayer that are deducted from taxable income.
To avoid double taxation of individual entrepreneurs and partnerships in all municipalities with the exception of large cities, the amount of trade tax paid is taken into account when paying income tax.
Taxpayers raising children are entitled to a special tax deduction. In 2021, its amount is 7,812 euros per child. If the child's parents do not live together or are divorced, each of them is entitled to a deduction of half this amount (€3,906 in 2021). The state also pays child benefits. The most advantageous option for the taxpayer is calculated automatically when filing a tax return.
Special taxpayer expenses that are excluded from taxable income include healthcare costs and self-employment pensions, as well as alimony paid to an ex-spouse in a divorce, tuition fees at private educational institutions, donations, membership fees and expenses for professional education received for the first time .
According to the Pension Income Law (Alterseinkünftegesetz) 2005, the portion of the pension in excess of the basic deduction amount of €9,408 per year for single pensioners and €18,816 per year for retired spouses is subject to income tax accordingly.
Regular payments received under pension insurance or savings programs are not included in taxable income if they are received over an extended period of time and not as a lump sum payment. The tax exemption does not apply to so-called “Rister pensions” co-financed by the state.
In the event of no income, taxpayers receive income replacement benefits such as unemployment benefits, sickness benefits, maternity or parental benefits, benefits for the partially unemployed or benefits for the insolvency of an employer. All these payments are not taxed, but are taken into account when creating a progressive income tax rate.
Church tax (Kirchensteuer) is paid in addition to the income tax by church-going Catholics and Protestants in Germany. In Bavaria and Baden-Württemberg it is 8% of the income tax, in the remaining federal states it is 9%.
Germany uses a progressive income tax rate. The rate of this tax is not the same for all taxpayers, but grows according to income level. For residents whose taxable income does not exceed 9,408 euros per year, the income tax rate is 0%, from 9,408 to 57,051 euros per year - 14%, from 57,051 to 270,500 euros per year - 42%, more than 270 500 euros per year – 45%. The income of married persons is assessed jointly for tax purposes.
The solidarity surcharge (Solidaritätszuschlag), introduced to raise funds for the restoration of the lands of the former GDR, applies to all taxes related to the receipt of any type of income and amounts to 5.5%. If the amount of the supplement in monetary terms does not exceed 952 euros per year (81 euros per month), it is not paid.
One of the taxes in Germany for legal entities is corporate tax.
Corporation tax in Germany (corporate income tax, Körperschaftssteuer) is levied in accordance with the Corporation Tax Act (KSTG) and the Corporation Tax Regulations (KSTR).
The tax rate on company profits is 15% (a solidarity surcharge of 5.5% is applied). In addition, a fishing tax is also levied at the municipal level. The maximum total tax burden can be 30%.
Corporate and trade tax returns must be filed by July 31 of the year following the year in which those taxes were paid. Advance payments are made quarterly.
Corporate tax is subject to:
- corporate profits;
- investment income;
- capital gains income.
If a company is headquartered in Germany, income earned abroad is also subject to corporate tax.
Trade tax (Gewerbesteuer) is a tax on income from business activities. It is collected by the authorities of the city or municipality where the enterprise is located. Trade tax is one of the real taxes. The procedure for paying this tax is regulated by the Trade Tax Act (GewStG). The tax is required to be paid by all companies that receive income from commercial activities. For individuals, sole proprietors and partnerships, a deduction of 24,500 euros is provided, for associations - in the amount of 5,000 euros. There are no tax deductions for corporations.
The interest rate for determining the basis for calculating the trade tax is 3.5% and is valid throughout Germany. Once the amount of the tax basis is determined, the resulting value is multiplied by the percentage adopted in the particular municipality, after which the rate ranges from 7 to 14%.
Trade tax is paid in advance based on the projected level of income. The taxpayer can consent to direct debiting of funds from his account or pay the tax by bank transfer. If, when filing a return for the financial year, it turns out that the amount of the advance payment exceeds the amount of tax payable, the taxpayer will receive compensation.
German tax system
The basic principle of German taxation is: “taxes must correspond to the amount of services provided by the state.”
Germany has a complex and extensive tax system. You will be informed about all taxes that German citizens and non-citizens must pay every month: written notifications from the tax authorities are sent by mail. Help from specialists when paying taxes is common in Germany. New entrepreneurs and foreign entrepreneurs, as well as those who earn additional income, are always advised to consult experts when filing their first tax returns (for example, tax consultants, lawyers, certified auditors, auditors and financial inspectors).
The consolidated budget of Germany is divided into three levels: - Central (state) budget (income and expenses of the entire country) - 48% of all tax revenues. - Budgets of 16 federal states. The budgets of different lands are not the same, depending on the economic factors of the regions - 34% of all tax revenues; Budgets of urban and rural communities - 13% of all tax revenues. Additionally, the state budget includes the income of the German Central Bank and state-owned enterprises. The budgets of the states, initially uneven, are distributed vertically and horizontally for financial “equality” - from highly profitable regions (accident, Württemberg, North Rhine-Westphalia) in favor of “less economically developed ones (Saxony, Schleswig-Holstein) there is a redistribution of tax revenues, additionally financially” weak lands receive government subsidies. General tax rules in Germany are regulated by the Tax Procedures Act - Abgabenordnung.
Taxes in Germany provide about 80% of budget revenues. That is why they are considered by the government as the main means of government influence on economic development.
The basic principle of German taxation, since the inception of the system, has been: “taxes must correspond to the amount of services provided by the state.”
There are a total of 45 types of tax in Germany, including tax for dog owners, tax on acetic acid, church tax, tax on sparkling wines, energy, entertainment, coffee, beer, hunting, second home or apartment, alcohol and many others.
In general, all taxes in Germany can be divided into three main groups:
- income taxes
- property taxes
- transaction and consumption taxes
Main types of income tax:
- personal income tax – Einkommensteuer
- Corporate income tax – Körperschaftsteuer
- business activity tax - Gewerbesteuer
Basic property taxes:
- land tax - Grundsteuer
- gift and inheritance taxes
Major transaction and consumption taxes:
- property acquisition tax
- VAT
Let's look at some taxes in more detail:
- Personal income tax
. The main source of government revenue - it provides about 40% of all tax revenues. Tax is imposed on the income of individuals from various sources (including income received in other countries, if they have not yet been taxed). Income tax includes:
- payroll tax
- capital income tax
Income tax is also levied on all income from industrial and agricultural activities, independent and non-independent labor, ownership of capital, rental housing, rental of any property, etc., up to income from speculative agreements.
This is a progressive tax. Its minimum rate is 19%, maximum - 53%.
The tax-free minimum per year is 5,616 euros (for singles) and 11,232 euros (for married couples)
For incomes that do not exceed 8,153 euros for singles and 16,307 euros for married couples, proportional taxation applies at a rate of 22.9%. Further, the tax is levied on a progressive scale up to an income of 120,041 euros (for singles) and 240,083 euros (for married couples). All income above is taxed at a maximum rate of 51%.
There are Tax benefits for children, age benefits, benefits for emergency circumstances (illness, accident) and others.
2. Value added tax (VAT).
Value added tax is, in principle, levied on any service that an entrepreneur provides for a fee in the course of his business activity. The object of taxation is any service not intended for personal consumption, as well as the import of items from countries that are not members of the EU.
According to the VAT Law, there are two tax rates in Germany: a general tax rate of 19% and a reduced tax rate of 7%.
The reduced tax rate applies mainly to the supply, personal use and import of most food products (except drinks) and in the area of catering establishments. Certain benefits are also provided for small enterprises. VAT is not charged, for example, on export supplies and customer-to-consumer processing of items intended for export, on supplies within the EU, on the provision of credit, the transfer and lease of land, on turnover in the medical and social spheres.
3. Corporation tax
paid by legal entities (joint stock companies, various partnerships, as well as government organizations, if they are engaged in private economic activities). The object of taxation is their profit during the calendar year. If a corporation has several owners, the tax rate is 30%. If the corporation has one owner, the rate is 45% of the profit.
Taxes in Germany are considered by the government as the main means of government influence on economic development; they provide about 80% of budget revenues. In Russia, taxes also provide about 80% of budget revenues. The similarity is that the activities of tax institutions in Germany are carried out by special institutions and departments that assess the level of expected tax revenues, and the Ministry of Finance of Germany draws up five-year projects for the country’s income and expenses and implements tax policy.
The experience of reforming the German tax system may be useful for the Russian Federation. As a federal state, it went through various stages of political and economic structure, repeatedly rose from the devastation caused by world wars and grew into an economically powerful market state with a pronounced social orientation.
Many federal states of Germany have been independent states for centuries. Hence there was a constant need to search for optimal relationships between the vertical and horizontal branches of government.
In any country with a federal structure, including Russia, the central problem is the delimitation of the powers of the central government and the subjects of the federation. This issue has also been resolved in Germany. Thus, as a result of the largest tax reform in December 1919, the financial sovereignty of the lands was eliminated. The right to receive and administer taxes remained exclusively with the state. The tax system has become centralized.
Unlike Russia, Germany uses both vertical and horizontal equalization of income. Highly profitable states (Bavaria, Württemberg, North Rhine-Westphalia) transfer part of their financial resources to less developed states (Saxony, Schleswig-Holstein). This was the result of many years of development of the tax system.
Tax policy goals
The country was defined by German Chancellor Otto Bismarck (1815-1898) in his speech to the Reichstag on May 2, 1879, where he demanded that the burden of taxes be transferred from income to consumption (expenses). This is where the catchphrase about Bismarck's tax coat came from.
Currently, Germany has two largest taxes - personal income tax and value added tax. The share of VAT in the country's budget revenues is 28%. Just like in Russia, the rate is differentiated. The general rate is 15%, but a number of food products and book and magazine products are taxed at a minimum rate of 7%. Taxes account for about 80% of total budget revenues.
Features of the German tax system
Consider the German tax system. It should be noted that the organization of taxation in Germany is based on the principles that were laid down by L. Erhard:
1) taxes should be as minimal as possible;
2) when taxing a particular object, the economic feasibility of levying a tax must be taken into account;
3) taxes should not hinder competition;
4) taxes must comply with structural policies;
5) the taxation system should be based on respect for the private life of the taxpayer and compliance with trade secrets;
6) double taxation must be eliminated in the system;
7) taxes must ensure a fair distribution of income in society;
The amount of taxes should be in accordance with the amount of services provided by the state.
The legislative basis for taxation in Germany is a basic and comprehensive law, which defines not only the general conditions and procedural principles of taxation (calculation procedure, relationships and powers to collect them), but also the types of taxes, as well as the distribution of tax revenues between the federation, states and communities .
The federal budget is formed from revenues:
· federal taxes: customs duties, value added tax, tax on income from insurance activities, bill tax, solidarity tax, European Community taxes, excise taxes (except for beer tax);
· shares in joint taxes;
· shares in the distribution of fishing tax.
The lands receive income from:
· land taxes, property tax, inheritance tax, tax on the acquisition of land, tax on vehicle owners, beer tax, tax on betting and lotteries, tax on fire protection, and revenue from casinos;
· shares in joint taxes;
· shares in the distribution of fishing tax. Joint taxes include: wage tax, income tax, corporate tax, value added tax (including turnover tax on imported goods).
Communities receive a portion of proceeds from:
· local taxes: trade tax, land tax, local excise taxes and tax on specific forms of use of income (tax on dog owners, on income from entertainment establishments);
· shares in revenues from payroll and income taxes;
· tax contributions within the framework of land legislation.
In this we can also trace the similarities between the tax systems of Russia and Germany, because in Russia taxes are also divided into federal, regional and local, which in turn go in different proportions to different budgets.
Churches in Germany (Catholic, Protestant and Lutheran) are authorized to collect church tax from believers of the corresponding concession.
From the above it follows that the tax system in Germany is multiple (there are 45 taxes), branched, and three-level. The main fiscal role is played by income taxes. In Russia, the three-tier tax system is also built on the principles of plurality (about 30 taxes) and ramifications.
Main types of taxes in Germany
Due to the wide variety of taxes in Germany, we will focus only on the main ones.
Personal income tax
is the main source of government revenue. The object of taxation under it is the income of individuals received from various sources: from work in agriculture and forestry, fishing activities, hired labor and from liberal professions, from renting or leasing movable and immovable property, from capital and other income.
When taxing income, two methods of collecting tax are used: at the source and by declarations, which are submitted to the tax service at the beginning of the calendar year following the reporting year.
Since 1993, Germany has introduced a tax-protected subsistence minimum, which is constantly changing upward. So, in 1997 it amounted to 12,095 DM for singles and 24,191 DM for married people; in 1998 it amounted to 12365 DM and 24731 DM, and in 1999 - 24731 DM and 26135 DM, respectively.
When forming the tax base for this tax, production expenses associated with the receipt of income and special expenses are subject to deduction from income. Some types of special expenses are subject to unlimited deduction (for example, church taxes, party dues), others with restrictions on the maximum amount of deductions differentiated depending on marital status. These are primarily deductions of insurance premiums and contributions for the targeted accumulation of funds for housing construction. Expenses for your own vocational training or advanced training, expenses for employees in your own household, as well as school expenses are deducted in a fixed amount. Special costs also include alimony payments to divorced or long-term separated spouses (they are taxable for the alimony recipient).
The tax base can be reduced by the amount of unforeseen expenses (expenses for a hospital stay, expenses of a single parent for household services when raising a child under 16 years of age).
There are also similarities between taxes in Russia and Germany. Unlike Russia, income tax in Germany is progressive. Its minimum rate is 19%, maximum - 53%. The maximum tax rate applies to citizens whose income exceeds 120 thousand marks. Although previously Russia also used a progressive income tax rate.
Income tax rates for 1997 are given in table. 1.
Table 1
| Tariff zones | Taxable income (TI) | Tax rate % | ||||
| WITH | BEFORE | |||||
| Lonely | Married | Lonely | Married | Lonely | Married | |
| 0 | 0 | 12095 | 24191 | 0 | 0 | |
| First limit progression zone | 12096 | 24192 | 55727 | 111455 | 25,9 | 33,5 |
| Second limit progression zone | 55728 | 111456 | 120041 | 240083 | 33,5 | 53 |
| Higher proportional zone | Over 120042 | Over 250084 | 53 |
At the end of the year, when filing a return, the amount of income tax withdrawn is adjusted depending on the actual expenses incurred and taking into account the non-taxable subsistence level.
Unlike Russia, in accordance with § 26 of the Income Tax Law (as amended on February 25, 1992), in Germany, spouses can choose both joint and separate taxation if three conditions are met:
1. Both spouses have an unlimited tax liability for income tax (they are tax residents of Germany). It should be noted that, as of 1 January 1996, the law allows joint declaration by spouses, one of whom is a citizen of a member state of the European Union (i.e. not tax resident in Germany), provided that at least 90% of the combined “worldwide” income spouses are subject to taxation in Germany, or the amount of their combined “worldwide” income not subject to taxation in Germany does not exceed DM 24,000.
2. Spouses live together. In the case of a joint declaration by spouses, one of whom is a citizen of an EU member state, the mandatory condition is that the permanent residence of the spouses is either in Germany or in the EU member state of which the second spouse is a resident.
3. The above conditions occurred at the beginning or occurred during the tax period for which the spouses file a joint return.
A prerequisite for the right of spouses to joint taxation is the actual marriage of the spouses. Both spouses must submit written consent to joint taxation to the tax authority.
Joint taxation of spouses combines all income received by each spouse. All expenses, deductions and allowances to which each spouse is legally entitled are subtracted from the spouses' combined gross income. The resulting total taxable income of the spouses is divided equally between the spouses. For each half of total income, income tax is calculated at progressive rates, uniform for all taxpayers.
Joint taxation of spouses is a distinctive feature of taxation in Germany.
Corporation tax
paid by legal entities (joint stock companies, various partnerships, as well as government organizations, if they are engaged in private economic activities). The object of taxation is the profit received by the above taxpayers during the calendar year. When forming a taxable object, accelerated depreciation is widely used. Interest on loans is tax deductible. In relation to corporation tax, there are limited and unlimited tax liabilities. Unlimited tax liability applies to all income of those legal entities whose directorate or location is located on the territory of the Federal Republic of Germany (the legal entity is a tax resident of the Federal Republic of Germany). Limited tax liability is borne by those legal entities that receive income in Germany, but have a permanent establishment outside its borders.
The basic corporate tax rate is 30%. In the event that corporate profits are not distributed, a rate of 45% is used. In this way, the distribution of corporate profits is stimulated.
The problem of double taxation, which arises everywhere when dividends paid to shareholders from the net income of corporations are included in the taxable personal income of an individual, is solved in Germany by offsetting the amount of tax paid by the corporation when forming the taxable base for shareholders for income tax.
The most significant from a fiscal point of view in Germany among taxes on legal entities is the value added tax
, which replaced the previously levied sales tax.
The object of this tax is turnover, that is, the supply of goods, the provision of services, the import of goods and their acquisition. In practice, this is a general excise tax on private and public consumption.
Like any other indirect tax, it places a burden on the consumer, and legal entities are its technical collectors. The tax is included in the price of the goods with a mandatory separate indication of its amount in invoices.
The calculation scheme for this tax is structured in such a way that all goods and services reaching the final consumer are subject to this tax to the same extent, regardless of the number of turnovers of the product or service on the way to the consumer. This is ensured through a system of preliminary deductions of tax amounts carried out by legal entities in financial management. A general tax rate of 16% applies to most turnover of goods and services, a reduced rate of 7% applies to supplies of personal consumption products, import and intra-EU consumption of almost all food products (excluding drinks and restaurant turnover), as well as services short-range passenger transport, book turnover.
Preliminary tax deductions are made only if goods or services are used by a legal entity for production purposes.
A number of goods and services are exempt from value added tax. These include export supplies, certain turnover of maritime shipping and air transport, as well as a number of other services related to import, export and transit export-import operations. These goods and services are subject to preliminary VAT deduction. Another group of exempt goods and services that do not provide for a preliminary deduction include the services of doctors and representatives of other medical professions, the services of the federal insurance company, the services of most hospitals, summer schools, theaters, museums, as well as the provision of loans and the rental of land plots and some other.
Trade tax
in Germany it is one of the main local taxes.
According to the income component of the trade tax, taxation is subject to, in addition to profit, an amount equal to 0.5% of the amount of interest for the use of borrowed capital funds taken for a long term. Losses received from the activities of other enterprises (with the taxpayer's share participation in it) are also taken into account.
A number of deductions are provided: for an amount equal to 1.2% of the value of land plots, the amount of profit received from the activities of other enterprises, as well as from the activities of foreign branches. If there are previous years, the tax base is reduced by their amount.
Taxation conditions for this part of the tax are differentiated by categories of taxpayers.
For personal taxpayers (individuals and partnerships), a non-taxable minimum has been established, by which taxable income is reduced (in the amount of 48,000 DM). In the new lands (former GDR) it is equal to 84,000 DM.
For this category of taxpayers, income tax is calculated at rates differentiated depending on the amount of taxable income:
1% for the first 24000 DM
2% for the next 24000DM
3% for the next 24000DM
4% for the next 24000DM
5% for all subsequent ones.
For other taxpayers, the rate of trade tax in its income portion is 5%.
The second component of the trade tax as an object of taxation, as already indicated, was represented by capital. The tax base consisted of the value of the taxpayer’s own capital on the balance sheet plus 0.5 of the value of borrowed capital, if its value exceeded 50,000 DM plus the capital of undeclared persons (in Germany it is called quiet capital). The following were subject to deduction: the cost of land, the cost of capital invested in the activities of other enterprises, the cost of capital in foreign branches.
For all categories of taxpayers, the same non-taxable minimum was established equal to 120,000 DM. The tax rate was set the same for all categories of taxpayers and equal to 0.2%.
The final tax amount is determined by multiplying it by the rate (tariff) set by each state independently.
Land tax
In Germany, land plots owned by legal entities and individuals are taxed. Tax collection is carried out by communities. The tax rate consists of two parts, one of which is set centrally, the other is a community surcharge. The size of the centralized rate is differentiated by land users, which is formally reflected in the existence of two types of land tax:
“A” - for agricultural and forestry enterprises;
“B” - for land plots, regardless of their ownership.
Institutions financed from the state treasury, churches, various non-profit enterprises, as well as lands used for scientific purposes and public purposes are exempt from paying the tax.
The amount of tax depends on the value of the land and the size of the tax rate. The rate for tax “A” is 0.246%, for tax “B” - 0.423%.
In the final calculation of the tax amount, significant importance belongs to the community's adjusting rates, which are differentiated depending on the purpose of the land (for forestry and agriculture - 0.6%), as well as the intensity of use of the land plot for residential buildings and the cost of buildings built on it. So, for example, if a house is owned by one family, then if the cost of the house is no more than 75,000 DM, the rate will be 0.26%, and over 75,000 DM - 0.35%. If there is a two-family house on the land plot, the rate is 0.31% (without differentiation from the cost of the structure). In other cases, for developed and undeveloped land plots the rate is 0.35%.
Legal entities that pay this tax are allowed to deduct land tax as expenses when taxing profits.
Property taxes occupy an important place in the German tax system
, whose history goes back more than 920 years. Property tax is levied on the property of legal entities and individuals. As with income tax, there is a distinction between limited and unlimited tax liability when levying this tax. The basis for calculating this tax is the value of the taxpayer’s total property at the beginning of the calendar year, reduced by the non-taxable minimum. For individuals it is equal to 70 thousand DM. An additional non-taxable minimum of 30 thousand DM is provided to it if the taxpayer is over 60 years old or has been disabled for three years.
The property tax rate for legal entities is 0.6% annually of the value of taxable property, for individuals - 1.0%.
This German tax is similar to the property tax in Russia.
When forming the tax base for this tax, debts and obligations, as well as benefits established by law, are deducted. Thus, interest-bearing and non-interest-bearing debts, savings deposits, bank assets, assets of postal accounts, West German and foreign means of payment, shares and shares below the total amount of 11 thousand DM are not taken into account; for individuals - insurance, benefits from the employment fund, etc. Precious metals, precious stones, pearls, coins and medals are taken into account only if their value exceeds 10 thousand DM, jewelry and luxury items - 10 thousand DM in total, works of art, collections - with a cost above 20 thousand DM .
Inheritance and gift tax
is charged at rates differentiated depending on the degree of relationship and the value of the acquired property.
Excise taxes
in Germany, as in Russia, they are mainly sent to the federal budget (except for beer). Excise goods and services include: liquid and mineral fuels, sparkling wines, coffee, beer, tobacco and tobacco products, alcoholic beverages.
Social Security contributions
of the wage fund is 6.8%. The amount of contributions, as in the USA, is divided equally between employers and employees.
Additional Tax Features
Sometimes the establishment of new taxes in Germany pursues purely regulatory goals. A classic example is the tax on acetic acid, introduced at the beginning of the century and still in effect. It was then prompted by the need to create artificial acetic acid and stop using wine for this purpose. Cash receipts from this tax barely covered the costs of its collection, but the technical problem was solved and the economic goal was achieved. The tax is preserved today as a historical relic, bringing several million marks to the German budget.
And here is a more modern example: the solution to a social problem, rather than an economic one, by increasing taxes. After a sharp increase in the excise tax on tobacco, there were significantly more non-smokers than during the long propaganda campaign about the dangers of smoking.
Environmental problems are also solved through taxes. At one time, the country's industry resisted equipping cars with catalysts. Then the tax on cars equipped with them was sharply reduced, and the excise tax on those types of gasoline that are used in cars with catalysts was reduced. This “compensated” for the additional costs of introducing catalysts.
Conclusion
The tax systems of Russia and Germany have many similarities. The tax system of federal Germany is based, like the Russian one, on the principle of multiple taxes (there are about 50 types). In Russia, taxes also provide about 80% of budget revenues. In Russia, as in Germany, taxes are divided into federal, regional and local, which in turn go in different proportions to different budgets. Many types of German taxes have something in common with Russian taxes. However, in Germany there are more types of taxes, and most of them have their own specifics, acquired during the historical process.
Unlike Russia, Germany uses both vertical and horizontal equalization of income. There are also some special taxes specific to Germany (vinegar tax, etc.).
However, in connection with the reform of the Russian tax system, the German tax system is of significant interest to Russian legislators. A detailed study of the German tax system can serve as a sure help for improving the Russian tax system.
A complete comparison of the tax systems of Russia and Germany.
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Transaction and consumption taxes
Value added tax (Mehrwertsteuer) in Germany applies to all purchases of goods and services. The standard VAT rate is 19%. For goods of mass daily consumption, such as staple foods, a reduced rate of 7% is provided.
On June 12, 2021, the German government decided to temporarily reduce the standard VAT percentage from 19 to 16%, and the preferential rate from 7 to 5% in the period from July 1 to December 31, 2021 in order to stimulate consumer demand during the coronavirus pandemic.
Real estate acquisition tax (Grunderwerbsteuer) is paid by property buyers and is one of the purchase costs. Its application is regulated by the Real Estate Acquisition Tax Act (GrEStG). The tax rate depends on the specific federal state and in 2021 ranges from 3.5% (Bavaria, Saxony) to 6.5% (Brandenburg, North Rhine-Westphalia, Saarland , Thuringia, Schleswig-Holstein).
What is the VAT rate in Germany for export/import of services and goods?
The standard level is 19%. It is applicable to the vast majority of products and services. A reduced rate is used for certain categories: food, agricultural products, printed publications, tickets to entertainment events, and hotel and hotel services. For the listed categories, the duty rate is 7%.
Registration is mandatory for local entrepreneurs and non-residents with a turnover of 17,500 euros or
in the previous year and the planned increase in the threshold
to 50 thousand euros
in the next reporting period.
All companies submit quarterly returns no later than the 10th day
of the following month. Payment must be made within the same period. If the calculated and transferred interest in financial equivalent turns out to be more than expected, the state undertakes to compensate for the damage.
If, at the end of the last reporting period, the total amount of duties amounted to 7,500 euros or more, this year the company must report on the turnover of funds and goods on a monthly basis.
VAT refund when purchasing in Germany
The release of funds is subject to two conditions:
- The seller has an individual
taxpayer number. - The end consumer is an individual or legal entity from among non-EU residents
, as well as an
EU resident legal entity with an individual payer number
in their country.
It is easier to return VAT in the country than in many other European countries. If in Italy or Spain it is possible to make a purchase and request a return at customs or at the airport, then in Germany wholesalers are invoiced immediately without indicating value added tax.
The export of any product is permitted and is not subject to duties; for the import of a large batch of products, a 19% fee is charged; when importing machinery or other equipment, 3% of the cost of the units is deducted monthly. Duty-free treatment is allowed for small parcels and cargo.
Tax system in Germany: features
The response to the need to restore the war-ravaged German economy was a set of reforms carried out by Ludwig Erhard as Minister of Economy of the Federal Republic of Germany.
Part of the transformations were the following provisions formulated by him, which underlie the functioning of the country’s taxation system at the present time:
- taxes should be as minimal as possible;
- collection of taxes must be economically feasible;
- taxes should not hinder competition;
- taxation should be consistent with structural policies, aiming at a more equitable distribution of income;
- taxation should be based on respect for taxpayer confidentiality and trade secrets;
- the possibility of double taxation must be excluded;
- the amount of taxes must correspond to the volume of government services received by a citizen, including the protection of his rights.
Following these principles allows Germany to remain one of the most resilient economies in the world. At the same time, the relatively high level of taxes in Germany allows this country to maintain a high level of social security for its citizens.
Comparison of taxes in Germany and Russia: personal experience
The salary that is paid to an employee in Germany and the amount of which is written in the employment contract between the company and the employee is gross salary (Brutto-Arbeitslohn), i.e. the amount from which taxes and social charges have not yet been withheld. The amount of wages that an employee receives in his bank account is called net wages (Netto-Arbeitslohn).
In Russia
Tax rate of 13%: “if an individual is a tax resident of the Russian Federation, the majority of his income will be taxed at a tax rate of 13%. Such income includes, for example, wages
..." That is, from the wages due to us, an income tax in the amount of 13% will be withdrawn, which the employer will transfer for us.
For 2021 the rates are as follows:
- to the insurance part of the Pension Fund - 16% of the wage fund (if the insured was born in 1967 - 22%);
- to the funded part of the Pension Fund - 6% (if the insured person was born in 1967, then no contributions are paid);
- for compulsory social insurance for temporary disability – 2.9%;
- for compulsory social insurance against accidents at work (the amount depends on the occupational risk class) - X;
- to the Federal Compulsory Medical Insurance Fund – 5.1%.
Tax deductions
: “a citizen of the Russian Federation who receives income taxed at a rate of 13% can apply for them.” “A tax deduction is an amount that reduces the amount of income (the so-called tax base) on which tax is paid.
In some cases, a tax deduction means the return of part of previously paid income tax for an individual, for example, in connection with the purchase of an apartment, expenses for treatment, education, etc.
“It is not the entire amount of expenses incurred within the limits of the declared deduction that is subject to refund, but the corresponding amount of previously paid tax.” There are a lot of types of tax deductions, but the most important thing is that they really work and return the money.”
Total: 5.1% + 2.9%+22%+13% = 43%+X and the possibility of tax deduction
In our case (working husband, non-working wife, no children), my husband’s salary will generally be paid: 43% + X and the opportunity to return part of the money spent by submitting 3NDFL to receive a tax deduction. But only 13% will be deducted from the gross salary.
In Germany
Grundfreibetrag tax-free income.
In 2021, this is 8,820 euros for singles and 17,640 for families.
Tax classes and Lohnsteuer
(Die Einkommensteuer wird zum Beispiel auf Einkünfte aus selbständiger Arbeit, Kapitalvermögen oder Renten erhoben.
Lohnsteuer zahlen Arbeitnehmer auf ihren Arbeitslohn.
Sie ist keine eigenständige Steuer, sondern eine Form der Einkommensteuer. Einkommensteu er zahlt grundsätzlich jeder, der in Deutschland Geld verdient.)
What is taken from our wages; analogous to the Russian 13%, only on a larger scale: in each specific life and family situation, a person will have a different tax class, which means a different percentage of wages will be taken away.
The Lohnsteuer ranges from 14 to 42% and there is another 45% for the super rich. The higher the portion of income that is taxed, the higher the tax rate will be.
- Tax Class 1:
If you are single and do not qualify for tax benefits as a single parent. If you are divorced, long-term separated spouses/cohabitants. - Tax class 2:
single parents living alone. - Tax class 3:
married workers, as well as cohabitants running a household together, can choose this tax class if their wife/husband/partner does not work or earns significantly less. Then the person not working/earning less will receive tax class 5. - Tax class 4:
if in a couple both earn approximately the same amount. - Tax class 4 with Faktor
: once a year, married or cohabiting couples can apply to factor (a multiplier that is always less than 1, always 0.xx): then the total, joint amount of income tax is taken into account. In this case, the amount of income tax paid each month may more or less correspond to the couple's annual income tax payment. - Tax class 5:
if one of the married or cohabiting couple is in tax class 3. - Tax class 6:
if you have a second, third, fourth job.
There is also such a thing as Einkommensteuertarif (§ 32a EStG)
, which determines how much taxes you will pay on the taxable part of your income (Wie viel Steuer auf das zu versteuernde Einkommen gezahlt werden muss, ergibt sich aus dem Einkommensteuertarif (§ 32a EStG). Er ist in einzelne Zonen, beginnend mit dem Grundfreibetrag , unterteilt).
Tax agent, also known as employer (Lohnnebenkosten für Arbeitgeber).
For the employer, your value consists of Bruttolohn (your salary) and Lohnnebenkosten (that part of the deductions and contributions that is paid by the employer, so genannten Arbeitgeberanteile zur Sozialversicherung ( Sozialabgaben
) nebst Umlage für die Lohnfortzahlungserstattung (U1 und / oder U2) und Insolvenzgeldumlage.
Diese summieren sich in etwa auf 22% des Bruttolohnes
, sind also ein erheblicher Betrag, der zusätzlich zum Bruttolohns vom Arbeitgeber an die Sozialversicherungsträger zu entrichten ist). You can calculate how much your employer pays relative to your salary using a calculator.
As a rule, the employer pays two types of contributions - social contributions Sozialabgaben and other betriebliche und tariflich festgesetzte Beträge (employee and statutory defined contributions).
How much social contributions must the employer pay:
• 7.30% Krankenversicherung allgemein oder 7.00% Krankenversicherung ermäßigt. • 1.275% Pflegeversicherung (0.775% in Sachsen wegen Ausnahmeregelung). • 9.35% Rentenversicherung (oder 15.45% knappschaftliche Rentenversicherung) • 1.5% Arbeitslosenversicherung • 0.09% Insolvenzgeldumlage • Beitrag zur gesetzlichen Unfallversicherung, je nach Gefahrenklasse des Betriebes – X Gesamt: 20.32% + X
This may also include and be added to such payments as Lohnfortzahlung im Krankheitsfall (sick leave), payment for weekends and vacations.
And Innerbetriebliche Zusatzkosten may include payments such as Christmas money and the thirteenth salary.
Total: 20.32% + X or etwa auf 22% + (from 14% to 42% or 45%) = ? and the possibility of tax deduction
In our case (non-working wife, no children, working husband) and a salary of 50,000 per year, we pay: 31.887% + 19.325% (this number is taken from the tax calculator) = 51.212% + the possibility of a tax deduction. That is, 31.887% will be deducted from the husband’s gross salary for taxes and social contributions.
Rate of income tax and other fees in Germany
Income from agriculture or forestry.
Basic tax in Germany
Income tax in Germany is levied on individuals permanently residing in the country. Of the entire system of taxes, this is considered the most important, since it gives the highest percentage of all revenues - about forty. The types of income tax include income tax and payroll tax. It is relevant for:
- agricultural activities;
- industrial production;
- renting an apartment or house;
- leasing other property.
Some German citizens have certain tax benefits.
Existing main taxes in Germany
Despite the unfolding crisis, they continue to remain relevant in 2021. The German tax system is characterized by the availability of benefits for persons under the age of majority. There are also benefits for various disasters, illnesses and other emergency situations.
profit from work under the agreement;.
Salary tax, social charges
The employee and the company enter into an agreement specifying the salary amount. Taxes and various social fees are paid from it, which here, as in many European countries, are large. In Germany there is a progressive taxation scale, therefore, the higher your income, the more you have to pay to the budget.
Thus, both citizens and foreigners pay income and social contributions from their official salary. Income tax in Germany is the main source of replenishment of the state budget. Unlike the Russian Federation, here it is calculated on a progressive scale. If every Russian pays 13 percent, then a German citizen pays from 19 to 53%. The amount of the deduction depends not only on income, but also on marital status. The tax-free amount for single citizens is 5,616 euros per year, and for couples who have official marital status is 11,232 euros. If the income is below the established minimum, then contributions are not paid. Individuals and employers are required to pay social fees. 20% is withheld from earnings, and the organization pays the same amount.
Contributions are deducted in the following areas.
Who earns the most in Germany?
For big salaries, financial workers should go to Hesse, namely Frankfurt am Main.
§ Examples of salary calculation in Germany: gross / netto calculator
The following table 1 provides an example of calculating net wages for an employee who receives 3000, 2000 or 1000 euros gross, has 1 child and is in tax class III, living in Western Germany. In this case, his deductions from salary will look like this:
Table 1. Examples of calculating monthly gross/net salary
The absolute accuracy of the calculation is not guaranteed!
| Holds | Amount, in euros example 1 | Amount, in euros example 2 | Amount, in euros example 3 |
| Gross salary | 3’000.00 | 2’000.00 | 1’000.00 |
| Income tax | 161.17 | 0.00 | 0.00 |
| Church tax | 2.72 | 0.00 | 0.00 |
| Health insurance | 235.50 | 157.00 | 78.50 |
| Long-term care insurance | 45.75 | 30.50 | 15.25 |
| Pension insurance | 279.00 | 186.00 | 93.00 |
| Unemployment Insurance | 36.00 | 24.00 | 12.00 |
| Net salary | 2’239.86 | 1’602.50 | 801.25 |
| Difference, gross-net | 760.14 | 397.50 | 198.75 |
Refund of taxes and fees: cases, procedure
Citizens of the country have the right to a refund of part of their taxes and compensation for expenses. You can return expenses for training that do not exceed 4,000 euros per year. The tax service may even cover the costs of visiting exhibitions where the applicant went to retrain or search for an employer.
You can write off part of your taxes for those who make charitable donations, receive child benefits, or care for a family member who is disabled, elderly or infirm. You can return part of the amount for paying for your home telephone and Internet if you sometimes have to work from home. The Germans refund part of the expenses for the work of a nanny, janitor, and gardener. Reimbursement of expenses associated with the job search is also possible. For example, if you traveled for an interview, you spent money on printing files for your resume or paying for calls to potential employers. All this information can be reflected in your tax return and some of the expenses can be refunded.
Personal taxes
Land tax
This fee applies to all land owners. The entire amount received from fees is sent to municipal authorities. Moreover, it is absolutely the same for both citizens and foreigners, and amounts to 1.5%.
For donation and inheritance
Tax rates depend on the level of relationship, amount of property and class. The cost of an inheritance, as elsewhere, is calculated by a notary based on the market value.
- 1st class of relationship - children, spouses, grandchildren, grandparents - if the amount is less than 75 thousand euros, then the rate is 7%, up to 300 thousand - 11%, up to 600 thousand - 15%.
- 2nd class of relationship - parents, brothers, sisters, nieces and nephews - up to 75 thousand - 15%, up to 300 thousand - 20%, up to 600 thousand - 25%.
- 3rd class of relationship - other heirs -30%, regardless of the amount.
Per vehicle
Car tax in Germany depends on the environmental class, age of the car and cost. A car is subject to duty if it is registered in Germany or permanently resides on the territory of the state. Payment paper is issued only after registration and is calculated individually, depending on the type of vehicle, year of manufacture, engine type, volume of harmful substances emitted and engine size. Thus, for every 10 grams of emissions exceeding the permissible value, 20 euros are charged.
How to fill out a declaration
For people who live in the state for more than 6 months, they submit an income declaration. If a person belongs to classes 3, 4, 5 and 6, then this is mandatory; for others there are exceptions.
The tax return includes a main form and an additional one (N – for employees, K – for children, KSO – for property owners with cash savings and material wealth).
The following expenses are accepted for deduction:
- for training at your own expense in another profession (including educational materials, hotel, clothes for study);
- travel to places of study and work;
- contributions to charity;
- caring for elderly and sick relatives;
- Unexpected expenses.
Methods for filing a declaration:
- contact a consultant;
- go to the fiscal service office;
- on the Internet using the ELSTER program or on helper sites.
They check the application for 2-3 weeks, after which a notification of overpayment or additional payment is received. Everything must be done before May 31 of the year after the reporting year. The fine for late filing is from 10% of the amount of taxes, but not more than 25 thousand euros.
What are deductions for?
Not everyone contributes the same amount. In addition to the fact that the rates themselves are not the same (due to the progressive scale), there is a system of deductions that reduces the tax base. So, from the amount with which you must pay the mandatory fee, expenses for using public transport, social assistance and some other items are deducted. In addition, some adjustments to the rate may be made on an individual basis for certain groups of the population - for example, people over 64 years of age.
The amounts spent on donations, insurance premiums, and training to improve one’s own qualifications are eliminated. Expenses that cannot be predicted in advance (treatment in medical institutions, care for a family member in need of care and treatment) are also deducted from the total.
The deduction amount for special costs can range from 5 to 10% of the total weight. As for specific amounts, the interest rate will depend on income. Anything more than 204,000 euros involves sending almost half of the earnings to the treasury (47%).
The state does not charge a fee on the following payments:
- payment for health treatments, fitness studios;
- travel to and from work;
- costs of caring for young children;
- products at a reduced price.
