Taxation in Germany

The tax law is the special field of public law, which governs the imposition and collection of taxes. The process of tax assessment and collection is largely determined by the Tax Code, which contains the main provisions of the tax procedural law, while the substantive tax law, ie the specific provisions is anchored to the amount of tax liability in numerous individual laws. In a broader sense, the legal standards are expected to tax law dealing with the tax authorities and tax courts. However, the rules that deal with the tax legislation and the allocation of tax revenues (part of the Basic Law and the decomposition law ) are usually not counted the actual tax law. However, these legal norms are essential for the understanding of tax law.

The word " control " comes from the Old High German stiura and means as much as support, aid, or even help. According to the legal definition in § 3Abgabenordnung (AO ) Taxes are cash benefits

• Not be a consideration for a special performance and
• By a public body (federal, provincial or municipal )
• For generating revenue
• Be imposed on all in which the offense applies to which the Act relates is subject.

Import and export duties according to Article 4, No. 10 and 11 of the Customs Code ( duties ) and agricultural levies of the European Union are also part of the taxes.

• 5.1 at the federal level
• 5.2 at the country level
• 5.3 at the local level

• 6.1 types of taxes in Germany
• 6.2 church tax
• 6.3 tax burden in Germany and internationally

• 8.1 tax burden on labor and capital income of households
• 8.2 Excessive cash tax receipts in the Federal Republic 1991-2011

• 9.1 Purpose of tax collection
• 9.2 criticism 9.2.1 Common criticisms
• 9.2.2 Economic criticisms

Historical Development

For the development of the control system to the 19th century, see Control.

( 1871: follows at this point)

Legislation

Constitutional basis ( fiscal autonomy)

The principles of German tax law are defined as financial constitutional law in the Constitution. After tax legislative sovereignty, territorial tax income and tax administration authority are distributed according to various criteria on national, regional and local authorities.

Autonomy of the tax law

The tax law is an independent area of ​​law. It includes all the legal standards that govern the taxation of the Federal Republic of Germany, in particular the relationship between the institutions of the tax authority and the taxpayer. Tax situations and legal terms should be defined independently. A binding to the civil law is also not when tax laws in civil law terms are used (so-called autonomy of the tax law).

Division of the tax law

A distinction is made between general and special tax law.

For general tax legislation are the areas of law that are equally considered as a staple to the individual taxes ( such as the Tax Code, Valuation Act, Finanzgerichtsordnung, financial management, law, etc.).

The special tax law consists of the single tax laws together (eg Income Tax, Corporation Tax Act, Sales Tax Act, etc.).

Principles of tax law

The German tax law is the following - coined principles - enshrined in the Basic Law:

• Taxation according to the performance
• Social state principle
• The taxation law
• Uniformity of taxation
• Net principle (Tax)

Court

According to Article 108, paragraph 6 of the Basic finance jurisdiction shall be uniformly regulated by federal law. With the Finanzgerichtsordnung are set up as instances:

• In the countries of the tax courts as the top regional courts,
• In the covenant of Federal Fiscal with headquarters in Munich.

Be distinguished from litigation is non-judicial remedy. This appeal procedure gives the taxpayer the opportunity, even to let a tax assessment by the tax authorities again and comprehensive monitoring and to leave as correct possible errors in a free and efficient procedures.

Customs and Excise Department

The administration of taxes is analogous to tax income sovereignty and the federal structure of Germany accordingly transferred the following authorities ( Tax Administration Act ):

At the federal level

Federal tax authorities - and thus responsible for the uniform federal taxes - are

• As the supreme authority, the Federal Ministry of Finance

• As higher authorities: the Federal Securities Administration,
• The Federal Monopoly Administration for Spirits
• The Federal Central Tax Office

• As a means authorities set up so far: the Customs Criminal Office
• The federal tax offices

• The main customs offices including its departments ( customs offices, customs commissioners )
• The customs investigation offices

At country level

Land revenue authorities - and thus responsible for country-specific taxes - are

• As the supreme authority, the competent supreme Land authorities (usually the country of Finance)
• As a means authorities the regional tax offices, or in Bavaria, the country's Tax Office
• As local authorities, the tax authorities

At the local level

The terms of reference for municipal taxes are regulated by local tax laws and the individual municipal codes.

Tax types

Taxes can be distinguished in many occasions of ways, including with regard to

• Control ownership - in direct taxes is the economically burdened citizens of the taxpayer; in indirect taxes leads a third party control for the economically burdened citizens from
• Tax legislative sovereignty - only the federal government and the states are entitled to tax legislation.
• Tax income sovereignty - on the question of who is entitled to the income, joint taxes, federal taxes, state taxes and local taxes are differentiated
• Control object - it can possession, the income, sales and consumption is taxed
• Economic differentiation in production and import taxes in income and capital taxes

Types of taxes in Germany

Currently (as of: January 14, 2010) existed in Germany following tax types with the corresponding tax revenue:

Church tax

In Germany, the recognized as a public corporation religious communities are entitled to a tax levy = church tax. Almost all churches take advantage of that and use, however, usually have the tax authorities of the federal states charged with collecting.

Tax burden in Germany and internationally

After calculating the union- Economic and Social Research Institute of the Hans Boeckler Foundation effective taxation is on private capital income at 22.6 %. On a similar level, the EU Commission and the OECD estimates the effective load. On average, they lie effective in 29.8 % in the EU -15 countries.

Tax Reform

Tax burden and tax revenue

Tax burden on labor and capital income of households

Source: Federal Statistical Office, calculations by WSI

Excessive cash tax receipts in the Federal Republic 1991-2011

Political controversy over the tax collection

Due to the financial impact on the citizens and the tax laws are subject to an ongoing policy issue and much criticism. Main criticisms have been for many years, the complexity of tax laws and the alleged circumvention possibilities it possible in particular to the high-income to evade the tax burden on the design alternatives.

Purpose of tax collection

Taxes with fiscal Purpose: To control generate state revenue, which funded the State's expenses, such as the establishment, improvement and maintenance of the infrastructure.

Taxes with guidance Purpose: Some taxes are intended to influence specific behaviors. So you can for example try to curb smoking a high tobacco tax or an environmental tax to reduce emissions.

Taxes with redistribution Purpose: To control can be used to achieve a politically desired social redistribution of income.

Criticism

The criticism extends substantially to the points:

General criticisms

• Tax represents the forced surrender represents the use of the funds can no longer be influenced by the donors.
• Justice - ( Who is to how many pay taxes )
• Adequacy
• Effectiveness ( in taxes as a steering function - for example, the eco-tax )
• Enforceability ( against corresponding lobby)

Economic criticisms

As economic impact taxes would therefore ...

• Generally result in a net welfare loss ( detailed description in the article)
• Incentives to take economies (see Laffer Curve )
• Finance in addition to the necessary and appropriate also inefficient state activity
• In the case of petty taxes no significant revenue for the state provide ( tax collection and enforcement incur considerable costs )
• Unemployment cause ( a possible economic activity is hindered by the tax burden or even prevented, because the price of the product is too high for potential buyers through taxes)

Taxes are not neutral decision in general. Especially in the Anglo-Saxon literature is therefore often advised to levy taxes on the markets in which the demand inelastic to prices responding ( see also price elasticity ).

Another question deals with the tax incidence. With the introduction of the tax should be clear who bears the actual burden of the tax. The tax debtor pays the tax in accordance with the statutory directive ( payable ). The control carrier bears the burden of the tax ( load ). However, the tax payer is not the same as the control carrier, because of the tax liability can shift the payment burden on the control carrier in the Tax shifting. Whether this is successful or not depends on the market structure, the type of control (volume control, value added tax ) and the price elasticity of supply and demand.