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Man working from home (symbolic image): The home office flat rate will be extended and increased
Photo: Finn Winkler / dpa
The federal government has initiated numerous changes in tax law.
The cabinet approved the plans on Wednesday, so they can now be tabled in parliament.
Probably the most important point from the point of view of many taxpayers: the inflation compensation law is intended to
combat so-called
cold progression .
This effect occurs when a wage increase equal to inflation is eaten up by the application of a higher tax rate.
For 2023 and 2024, the income tax rate is now to be adjusted accordingly.
To this end, the key values of the income tax rate will be raised from 2023 - higher tax rates will only apply if the taxable income is higher than at present.
According to Federal Finance Minister FDP boss Lindner, 48 million people will benefit from the relief.
In a family of four with two children and an annual income of 56,000 euros, an additional burden of 680 euros is averted.
According to the cabinet proposal, the adjustment will lead to a drop in tax revenue of 12.2 billion euros in 2023 and almost 18 billion in 2024. The exact amount of the adjustments is to be determined in autumn when expert reports are available.
Lindner said he was in favor of automatic adjustment, a so-called tariff on wheels, going forward.
»In any case, I will do my utmost to promote it.«
In Germany, the top tax rate is 42 percent, but a surcharge is levied on particularly high incomes, so that a total of 45 percent is skimmed off.
This rate – the so-called wealth tax – currently applies to incomes of 277,826 euros or more.
This value should not be changed in 2023 and 2024.
In addition, the
value added tax on gas
will be reduced for a limited period of time - from the beginning of October 2022 to the end of March 2024. Then the reduced rate of seven percent will apply instead of 19 percent.
According to the Annual Tax Act 2022, among other things, the installation of solar systems and their operation are tax-deductible.
"We are talking about measures with a volume of significantly more than 15 billion euros in relief," said Lindner.
The reduction in VAT on gas will cost the state a good eleven billion euros by March 2024.
Companies are expected to pass on the reduction in full to consumers, according to the formulation aid for the parliamentary groups of the traffic light coalition in the Bundestag.
The measure is intended to cushion the burden on end consumers elsewhere - for example through the gas levy planned from October to stabilize import companies such as Uniper.
The planned law is also intended to increase
child benefit
– by €18 a month for the first two children and €12 for the third child.
The changes are expected to take effect from 2023.
The child benefit for the first three children should then be a uniform amount of 237 euros.
The child allowance will be increased accordingly for the years 2022 to 2024.
The annual tax law is also intended to promote more
solar systems
on the roofs of private houses.
Here, citizens often shy away from installing photovoltaic systems because of bureaucratic hurdles.
In the future, sales tax will be set to zero percent for delivery and installation.
In addition, income from the operation of the plants should be exempt from income tax up to a certain level.
Contributions to
pension insurance
should be fully tax deductible from next year.
According to the current legal situation, this would not happen until 2025.
The preference goes back to the coalition agreement.
The background to this is a judgment by the Federal Fiscal Court on prohibited double taxation - i.e. taxation of both the income from which pension contributions are paid and the subsequent pension payment.
The
savings allowance
will be raised to 1000 euros.
Employees who sometimes work from home should continue to be able to claim a
home office flat rate
of five euros per day for the costs incurred - the maximum amount will be raised from 600 to 1000 euros.
According to the draft, anyone who uses a home study because no other workplace is available - Lindner named teachers as an example - can deduct a flat rate of 1250 euros a year from tax.
The so-called
peak
compensation for particularly energy-intensive companies will be extended by one year and will therefore also apply to 2023.
The companies can have up to 90 percent of the energy and electricity tax refunded.
Around 9,000 companies benefit from this in the amount of 1.7 billion euros.
The Annual Tax Act is also intended to set the organizational requirements for
direct payments
to every citizen
create.
To do this, the tax identification number should be linked to the Iban, i.e. the bank details.
According to the cabinet proposal, all measures from the annual tax law together should lead to a reduction in state tax revenue of 3.2 billion euros next year, and 3.5 billion euros are expected in 2024.
dab/dpa/Reuters