Federal budget trends
| Estimated 20161 |
January to December 20162 |
January to December 2015 | |
|---|---|---|---|
|
Expenditure3 | 316,900 | 306,625 | 299,285 |
|
Revenue3 | 310,515 | 316,829 | 311,055 |
|
Tax revenue | 288,083 | 288,991 | 281 706 |
|
Fiscal balance | -6,385 | 10,2042 | 11,792 |
|
Financing/use of surplus: | |||
|
Cash resources | 0 | 0 | 0 |
|
Revenue from coin | 285 | 300 | 353 |
|
Transfer to reserve funds | 6,100 | -4 | -12,145 |
|
Net borrowing/ | 0 | 0 | 0 |
|
1 Figures reflect the government draft of the 2016 Supplementary Budget Act; cabinet decision of 30 November 2016. 5 (-) debt repayment; (+) borrowing | |||
Trends in general government tax revenue
|
Period |
Total tax revenue |
|---|---|
|
Projection for 20161 | 642,386 |
|
December | 87,377 |
|
January to December | 648,310 |
| 1 Source: Working Party on Tax Estimates, November 2016 | |
|
2016 |
December |
Year‑on‑year |
January to December |
Year‑on‑year |
2016 estimates4 |
Year‑on‑year |
|---|---|---|---|---|---|---|
|
in €m |
in % |
in €m |
in % |
in €m |
in % | |
|
Joint taxes |
|
|
|
|
|
|
|
Wages tax2 |
23,923 |
+4.1 |
184,826 |
+3.3 |
184,300 |
+3.0 |
|
Assessed income tax |
14,815 |
+11.2 |
53,833 |
+10.8 |
52,900 |
+8.9 |
|
Non-assessed taxes on earnings |
2,376 |
+15.8 |
19,452 |
+8.4 |
19,370 |
+7.9 |
|
Final withholding tax on interest and capital gains |
750 |
-1.6 |
5,940 |
-28.1 |
5,648 |
-31.6 |
|
Corporation tax |
7,482 |
+24.4 |
27,442 |
+40.1 |
23,460 |
+19.8 |
|
Value added taxes (VAT) |
18,481 |
+0.3 |
217,090 |
+3.4 |
217,350 |
+3.5 |
|
Trade tax apportionment |
916 |
+5.6 |
4,237 |
+5.9 |
4,068 |
+1.7 |
|
Increased trade tax apportionment |
830 |
+4.8 |
3,594 |
+5.5 |
3,426 |
+0.6 |
|
Total joint taxes |
69,574 |
+6.7 |
516,413 |
+5.3 |
510,522 |
+4.1 |
|
Federal taxes | ||||||
|
Energy duty |
8,385 |
-0.8 |
40,091 |
+1.3 |
40,000 |
+1.0 |
|
Tobacco duty |
1,922 |
-14.3 |
14,186 |
-4.9 |
14,550 |
-2.5 |
|
Spirits duty incl. alcopops duty |
199 |
-3.8 |
2,070 |
+0.0 |
2,070 |
+0.0 |
|
Insurance tax |
609 |
+8.4 |
12,763 |
+2.8 |
12,750 |
+2.7 |
|
Electricity duty |
623 |
+3.9 |
6,569 |
-0.4 |
6,530 |
-0.9 |
|
Motor vehicle tax |
600 |
-0.6 |
8,952 |
+1.7 |
8,900 |
+1.1 |
|
Aviation tax |
137 |
+17.2 |
1,074 |
+5.0 |
1,070 |
+4.6 |
|
Nuclear fuel duty |
0 |
X |
422 |
-69.2 |
422 |
-69.2 |
|
Solidarity surcharge |
2,736 |
+9.3 |
16,855 |
+5.8 |
16,600 |
+4.2 |
|
Other federal taxes |
155 |
+5.2 |
1,458 |
-1.4 |
1,467 |
-0.8 |
|
Total federal taxes |
15,365 |
-0.5 |
104,441 |
+0.2 |
104,359 |
+0.1 |
|
Länder taxes | ||||||
|
Inheritance tax |
590 |
-13.2 |
7,006 |
+11.4 |
7,008 |
+11.4 |
|
Real property transfer tax |
1,171 |
+19.7 |
12,408 |
+10.3 |
12,395 |
+10.2 |
|
Betting and lottery tax |
151 |
+3.0 |
1,809 |
+5.6 |
1,835 |
+7.2 |
|
Beer duty |
53 |
+6.6 |
678 |
+0.2 |
673 |
-0.5 |
|
Other Länder taxes |
39 |
+1.6 |
442 |
+7.2 |
444 |
+7.8 |
|
Total Länder taxes |
2,004 |
+5.9 |
22,342 |
+9.9 |
22,355 |
+9.9 |
|
EU own resources | ||||||
|
Customs duty |
434 |
+3.8 |
5,113 |
-0.9 |
5,150 |
-0.2 |
|
VAT-based own resources |
354 |
+2.7 |
4,250 |
+1.2 |
4,280 |
+1.9 |
|
GNI-based own resources |
1,850 |
-16.6 |
19,911 |
-7.7 |
19,470 |
-9.8 |
|
Total EU own resources |
2,637 |
-11.5 |
29,273 |
-5.4 |
28,900 |
-6.6 |
|
Federation3 |
37,446 |
-7.3 |
289,018 |
+2.6 |
291,460 |
+3.5 |
|
Länder 3 |
41,001 |
+21.8 |
288,674 |
+7.7 |
280,930 |
+4.8 |
|
EU |
2,637 |
-11.5 |
29,273 |
-5.4 |
28,900 |
-6.6 |
|
Local authorities’ share of income tax and value added tax |
6,292 |
+6.1 |
41,345 |
+3.9 |
41,096 |
+3.3 |
|
Total tax revenue (excluding local authority taxes) |
87,377 |
+5.3 |
648,310 |
+4.5 |
642,386 |
+3.6 |
| 1 Methodology: Total cash income from the various taxes is recorded and allocated to the various government levels as stipulated by law. Actual tax amounts collected in the current month by individual government levels may differ from target amounts due to technical reasons. | ||||||
| 2 After deduction of child benefit refunds by the Federal Central Tax Office. | ||||||
| 3 After supplementary grants; any discrepancies with table on federal revenue are due to methodology used. | ||||||
|
4 Source: Working Party on Tax Revenue Estimates, November 2016. | ||||||
Tax revenue in December 2016
In December 2016, total tax revenue (excluding local authority taxes) posted another robust year-on-year gain, rising by 5.3%. In particular, the strong increase in revenue from joint taxes (6.7%) helped to drive this trend. The positive development was once again the result of increases – in some cases quite large – in revenue from wages tax, assessed income tax, non-assessed taxes on earnings and corporation tax. However, the result for corporation tax was inflated by several billion euros. Although considerable refunds were expected in 2016 due to supreme court rulings, only a small portion were actually made; the rest are still outstanding. By contrast, revenue from federal taxes was down slightly on the year in December, falling by 0.5%. Revenue from Länder taxes again recorded a marked gain (5.9%). In cumulative terms, total tax revenue (excluding local authority taxes) grew by 4.5% on the year in the 2016 fiscal year.
EU own resources
Payments of VAT- and GNI-based own resources to the EU fell by 11.5% on the year in December 2016. Transfers to the EU were based on the planned financial framework for 2016, with fluctuations over the course of the year being due to the EU’s financing needs at the particular time. Payments of own resources to the EU, including customs duties, fell by 5.4% in the 2016 fiscal year compared with 2015.
Distribution among the Federation, Länder and local authorities
In December 2016, the vertical distribution of VAT revenue was modified as a result of a new law relating to federal support for the Länder to help them pay for refugee-related costs. This change meant €4.6bn less in revenue for the Federation in December. In addition, state subsidies for public transport were increased to €8.2bn for 2016 as a result of another legislative amendment. These annual totals were accounted for in December, making it difficult to carry out year-on-year comparisons for federal and Länder tax revenue in December.
In purely numerical terms, the Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) fell by 7.3% on the year in December 2016. In contrast, Länder tax receipts increased by 21.8% on the year in December 2016. The fact that the Länder now receive a greater share of tax revenue is also reflected in the results for the whole year. In the 2016 fiscal year, federal tax revenue increased by only 2.6% over 2015, while Länder tax revenue posted a much greater rise of 7.7%.
Joint taxes
Wages tax
Revenue from wages tax again recorded robust growth in December 2016, with gross revenue from this tax increasing by 3.9% on the year. Employment growth has lost a certain amount of momentum since the summer, following a very strong start to 2016. Nevertheless, pay rises in 2016 under collective wage agreements continued to have a positive impact on tax revenue. Overall, the positive labour market trend is expected to continue in the coming months, given that labour demand remains very high.
Child benefit payments – which are financed from wages tax receipts – rose by 2.6% on the year in December 2016. On balance, cash receipts from wages tax were up by 4.1% in year-on-year terms in December. In the 2016 fiscal year, cash receipts from wages tax were up by 3.3% compared with 2015.
Corporation tax
Trends in corporation tax revenue were very positive in December (traditionally a high-revenue month for this tax), with gross revenue climbing by 24.5% over December 2015. After deducting investment allowance payments, which are financed from corporation tax revenue, cash receipts from this tax were up by 24.4% on the year. The trend in corporation tax revenue suggests companies are continuing to experience strong profitability. In the 2016 fiscal year, receipts from corporation tax posted a very large gain of 40.1% over 2015. However, considerable refunds which were expected for 2016 due to supreme court rulings have not yet had an impact on revenue; they are therefore likely to reduce cash receipts in 2017 by several billion euros.
Assessed income tax
December is also a high-revenue month for assessed income tax because prepayments are due. Gross revenue from assessed income tax posted strong growth of 10.6% in December 2016 over the same month last year. After deducting employee refunds, investment grants and owner-occupied homes premiums, cash receipts from assessed income tax were up by 11.2% on the year in December. Cash receipts from assessed income tax in the 2016 fiscal year surged by 10.8% in comparison with the previous year.
Non-assessed taxes on earnings
The trend in revenue from non-assessed taxes on earnings was very volatile over the course of 2016. In December, gross revenue from these taxes posted year-on-year growth of 18.4%. However, significant drops had been recorded in the preceding months (of 16.8% and 4.3% in October and November, respectively). After the deduction of refunds by the Federal Central Tax Office, which are financed from this revenue, cash receipts from non-assessed taxes on earnings were up by 15.8% on the year in December. Given the high level of volatility over the course of the year, cumulative figures on cash receipts are more informative. In the 2016 fiscal year, revenue from this tax posted a clear increase of 8.4% over 2015, a trend that was in line with the other profit-based taxes.
Final withholding tax on interest and capital gains
Revenue from final withholding tax on interest and capital gains fell by 1.6% on the year in December. In the 2016 fiscal year, receipts from this tax were down significantly by 28.1% compared with 2015, which was probably partly due to the low interest rate environment.
Value added taxes
Receipts from value added taxes were up only slightly (+0.3%) on the year in December 2016. Revenue from domestic VAT fell by 1.1% in year-on-year terms, while receipts from import VAT rose by 4.9%. Cumulative receipts from value added taxes were up by 3.4% on the year in the 2016 fiscal year. The trend in VAT revenue is roughly in line with expectations derived from trends in the aggregate tax base.
Taxes accruing to the Federation
In December 2016, revenue from taxes accruing solely to the Federation was down by 0.5% compared with the same month last year. This result was driven by an expected decline in tobacco duty revenue, along with a slight drop in receipts from energy duty. The fall in tobacco duty revenue occurred because manufacturers adopted different production patterns in 2016 compared with the preceding year. In 2015, tobacco products were produced in advance in order to avoid higher taxes that were set to take effect as of 1 January 2016; this was not the case in 2016, which led to a relative decline in purchases of excise stamps compared with 2015. This explains why tobacco duty revenue was down by 14.3% on the year in December 2016 compared with the high baseline figure from last year. Year-on-year declines in revenue were also recorded in December for spirits duty ( 3.8%), intermediate products duty (–14.4%) and motor vehicle tax (–0.6%).
These falls were partly balanced out by increases in revenue from electricity duty (+3.9%), insurance tax (+8.4%) and solidarity surcharge (+9.3%). Trends in revenue from other taxes had only a minor impact on the overall results for federal taxes. Revenue from taxes accruing solely to the Federation was up by 0.2% on the year in the 2016 fiscal year.
Taxes accruing to the Länder
Revenue from taxes accruing solely to the Länder rose by 5.9% on the year in December 2016. Although receipts from inheritance tax declined by 13.2%, revenue from real property transfer tax was up by 19.7%, building on an already high level in the previous year. Receipts from betting and lottery tax rose by 3.0% compared with the same period in 2015, while the yield from beer duty increased by 6.6%. For the 2016 fiscal year, receipts from taxes accruing to the Länder recorded a sizeable gain of 9.9%.
Credit market funds
| Debt level: 30 November 2016 |
Borrowing (increase) |
Debt repayment (decrease) | Debt level: 31 December 2016 | Change in debt level (balance) | |
|---|---|---|---|---|---|
|
(in €m) | |||||
| Budget borrowing | 1,101,189 | 5,111 | -17,149 | 1,089,151 | -12,038 |
|
broken down by purpose | |||||
|
Federal budget | 1,059,516 | 3,015 | -14,381 | 1,048,151 | -11,366 |
|
Financial Market Stabilisation Fund | 22,935 | 365 | -1,069 | 22,231 | -704 |
| Investment and Redemption Fund | 18,738 | 1,732 | -1,700 | 18,770 | 32 |
|
broken down by dept type | |||||
| Federal securities | 1,086,669 | 5,274 | -17,118 | 1,074,825 | -11,845 |
| Federal bonds | 670,558 | -718 | - | 669,840 | -718 |
| 30-year federal government bonds | 193,783 | 9 | - | 193,792 | 9 |
|
10-year federal government bonds | 476,775 | -727 | - | 476,048 | -727 |
| Inflation-linked federal securities | 66,428 | 36 | - | 66,428 | 36 |
| 30-year,inflation-linked,federal,government,bonds | 4,776 | -7 | - | 4,769 | -7 |
| 10-year inflation-linked federal government bonds | 47,092 | 18 | - | 47,110 | 18 |
|
Inflation-linked federal government debentures | 14,560 | 25 | - | 14,585 | 25 |
|
Federal notes | 218,628 | 2,922 | - | 221,551 | 2,922 |
| Federal Treasury notes | 106,694 | 3,033 | -14,000 | 95,727 | -10,967 |
| Treasury discount papers issued by the Federation | 22,099 | 0 | -3,008 | 19,091 | -3,008 |
| Other federal securities | 2,262 | 0 | -110 | 2,152 | -110 |
| Securitised loans | 9,816 | - | -31 | 9,785 | -31 |
| Other loans and ordinary debts | 4,704 | -162 | - | 4,542 | -162 |
|
broken down by maturity | |||||
| Short term (up to one year) | 156,893 | 152,081 | -5,812 | ||
| Medium term (one to four years) | 356,817 | 345,989 | -10,827 | ||
| Long term (over four years) | 587,479 | 591,081 | 3,602 | ||
|
for information purposes only | |||||
| Liabilities resulting from inflation adjustments of inflation-linked securities | 3,416 | 3,602 | 187 | ||
| Reserve for inflation adjustments of the principal of the inflation-linked securities according to Schlussfinanzierungsgesetz | 2,317 | 2,317 | - | ||
Guarantees
|
Purpose of guarantees |
Authorisided ammount 2015 |
Amount allocated |
Amount allocated
as of |
|---|---|---|---|
|
Export credit guarantees | 160.0 | 128.6 | 132.8 |
|
Loans to foreign debtors, direct foreign investment, EIB loans, KfW shareholding in EIF | 65.0 | 44.9 | 45.1 |
|
Financial cooperation projects | 25.7 | 17.2 | 13.3 |
|
Food stockpiling | 0.7 | 0.0 | 0.0 |
|
Domestic guarantees | 158.0 | 102.6 | 112.2 |
|
International financial institutions | 66.0 | 60.1 | 56.8 |
|
Treuhandanstalt successor organisations | 1.0 | 1.0 | 1.0 |
|
Interest compensation guarantees | 10.0 | 10.0 | 8.0 |
|
Guarantees for loans to Greece under the Monetary Union Financial Stability Act of 7 May 2010 | 22.4 | 22.4 | 22.4 |
Key dates on the fiscal policy agenda
|
Event |
Date |
|---|---|
|
Eurogroup and ECOFIN council meetings in Brussels | 20-21 February 2017 |
| Eurpean council in Brussels | 9-10 March 2017 |
| Meeting of G20 finance ministers and central bank governors in Baden Baden | 17-18 March 2017 |
|
Eurogroup and ECOFIN council meetings in Brussels | 20-21 March 2017 |
|
Eurogroup and informal ECOFIN council meetings in Malta | 7-8 April 2017 |
|
Spring meetings of the IMF and World Bank in Washington, D.C. | 20-21 April 2017 |
|
Meeting of the G20 finance ministers and central bank governors in Washington, D.C. | 21 to 23 April 2017 |
|
Eurogroup and ECOFIN council meetings in Brussels | 22-23 May 2017 |
Exact statistics and explanations for 1 to 5 above can be found in the German version of the Federal Ministry of Finance’s monthly report.