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31 January 2019

Overview of fed­er­al bud­getary and fi­nan­cial da­ta up to and in­clud­ing De­cem­ber 2018

Translated extracts from the Federal Ministry of Finance’s January 2019 monthly report.

For a concise overview of the preliminary annual accounts for fiscal year 2018, please consult press release no 1/2019. Here are the key figures for December 2018.

Tax revenue in December 2018

Total tax revenue (excluding local authority taxes) was up by 2.5% in December 2018 over the same month in 2017. Revenue from joint taxes rose by 3.0%, with VAT revenue posting substantial growth and wages tax receipts continuing to point upward. Receipts from taxes accruing solely to the Federation fell slightly compared with the same month in 2017. Receipts from taxes accruing solely to the Länder were up 12.0% on the year.

Tax revenue trends (excluding local authority taxes)

2018

December

Year-on-year
change 

January

to December

Year-on-year

change  

2018 estimates 4

Year-on-year
change

in €m

in %

in €m

in %

in €m

in %

Joint taxes            
Wages tax2

26,024

+5.2

208,231

+6.5

207,800

+6.3

Assessed income tax

15,827

+2.4

60,415

+1.7

60,200

+1.3

Non-assessed taxes on earnings

1,998

 -6.2

23,176

+10.8

23,200

+10.9

Final withholding tax on interest and capital gains

(including the former withholding tax on interest income)

418

 -54.2

6,893

 -6.0

7,491

+2.2

Corporation tax

7,845

 -9.0

33,425

+14.2

33,330

+13.9

Value added taxes (VAT)

20,890

+9.0

234,800

+3.7

234,650

+3.7

Trade tax apportionment

1,089

+11.2

4,968

+6.1

4,880

+4.2

Increased trade tax apportionment

965

+10.6

4,110

+5.5

4,010

+2.9

Total joint taxes

75,056

+3.0

576,020

+5.2

575,561

+5.1

Taxes accruing to the Federation

 

 

Energy duty

8,513

+0.0

40,882

 -0.3

41,100

+0.2

Tobacco duty

1,866

 -0.4

14,339

 -0.4

14,300

 -0.7

Alcohol duty (formerly spirits duty)

218

+13.8

2,133

+1.9

2,120

+1.3

Insurance tax

651

 -1.2

13,779

+3.8

13,700

+3.2

Electricity duty

521

 -20.4

6,858

 -1.2

7,000

+0.8

Motor vehicle tax

540

 -4.4

9,047

+1.1

9,010

+0.7

Aviation tax

130

+7.2

1,187

+5.9

1,175

+4.9

Nuclear fuel duty

0

X

0

X

0

X

Solidarity surcharge

2,882

+1.1

18,927

+5.4

18,800

+4.7

Other taxes accruing to the Federation

138

 -0.8

1,436

 -0.7

1,447

+0.1

Total taxes accruing to the Federation

15,459

 -0.7

108,586

+8.7

108,652

+8.7

Taxes accruing to the Länder

 

 

Inheritance tax

657

+30.8

6,813

+11.4

6,470

+5.8

Real property transfer tax

1,162

+7.6

14,083

+7.2

13,840

+5.3

Betting and lottery tax

149

 -0.2

1,894

+3.1

1,872

+1.9

Beer duty

37

 -31.9

655

 -1.3

670

+0.9

Other taxes accruing to the Länder

39

+1.3

467

+3.5

464

+2.9

Total taxes accruing to the Länder

2,044

+12.0

23,913

+7.7

23,316

+5.0

EU own resources

 

 

Customs duties

417

 -1.2

5,057

 -0.1

5,050

 -0.2

VAT-based own resources

201

+1.9

2,385

+1.0

2,410

+2.0

GNI-based own resources

2,730

+68.5

21,147

+48.3

21,180

+48.6

Total EU own resources

3,348

+49.5

28,589

+31.9

28,640

+32.1

Federation3

43,012

 -4.1

322,359

+4.2

323,820

+4.7

Länder 3

39,745

+7.4

314,058

+5.2

311,576

+4.4

EU

3,348

+49.5

28,589

+31.9

28,640

+32.1

Local authorities’ share of income and value added tax

6,873

+4.5

48,571

+7.6

48,542

+7.5

Total tax revenue (excluding local authority taxes)

92,977

+2.5

713,576

+5.8

712,579

+5.6

EU own resources

Transfers of own resources to the EU, including customs duties, stood at approximately €3.3bn in December 2018, up 49.5% over the same month in 2017. Transfers to the EU were based on the planned financial framework for 2018. Fluctuations over the course of the year depend on the EU’s financing needs at any given time.

Overview of fiscal year 2018

In fiscal year 2018, total tax revenue (excluding local authority taxes) posted a year-on-year gain of 5.8%. Broken down by category, revenue from joint taxes was up by 5.2%, receipts from federal taxes were up by 8.7%, and the yield from Länder taxes increased by 7.7%.

Distribution among the Federation, Länder and local authorities

The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder ) were down by 4.1% on the year in December 2018. In contrast, Länder tax receipts recorded a year-on-year gain of 7.4%. This was mainly due to a change in the distribution of VAT revenue that occurred in December 2018. Specifically, new legislation was adopted in late 2018 that (a) extended and adjusted federal support for the Länder and local authorities to help them pay for refugee-related costs and (b) adjusted revenue distribution arrangements between the Federation and Länder following the financial closure of the German Unity Fund. The new rules modified the vertical distribution of VAT revenue, benefiting the Länder and reducing the Federation’s revenue by roughly €1.6bn. Moreover, Länder -only taxes saw strong revenue gains (+12.0%), while the growth in the Federation’s tax receipts was further tempered by a fall in revenue from Federation-only taxes and by higher transfers of EU own resources. The local authorities’ take from joint taxes was up by 4.5% on the year.

Joint taxes

Wages tax

Growth in wages tax continued to be strong in December 2018 with gross revenue climbing by 4.3% compared to December 2017. This reflected continuing employment growth and rising incomes in Germany. Child benefit payments – which are financed from wages tax receipts – fell by 1.9% on the year in December 2018. One Land is experiencing problems with preparing the underlying data for child benefit payments, which continues to skew this figure. However, this effect had no impact on cash receipts. On balance, cash receipts from wages tax increased by 5.2% on the year in December 2018. Taken cumulatively, cash receipts from wages tax were up by 6.5% on the year in fiscal year 2018.

Corporation tax

Gross receipts from corporation tax fell by 8.9% in December, although this is a month when prepayments are due and revenue therefore usually tends to be high. It should be noted, however, that, due to a special factor, the receipts from corporation tax were significantly higher than usual in December 2017. Cumulative cash receipts from corporation tax grew by 14.2% in year-on-year terms in fiscal year 2018.

Assessed income tax

Gross receipts from assessed income tax were up by 2.3% in December, a month when prepayments are due and revenue therefore tends to be high. Overall, growth in gross revenue from assessed income tax was sluggish in fiscal year 2018. However, employee refunds were also slightly higher this year; once these refunds are subtracted from the gross figure, net cash receipts from assessed income tax posted an increase of 2.4%. In cumulative terms, cash receipts from assessed income tax were up by 1.7% on the year in 2018.

Non-assessed taxes on earnings

December 2018 saw a 13.1% year-on-year drop in gross receipts from non-assessed taxes on earnings. Combined with the decline in refunds paid out by the Federal Central Tax Office, which are financed from this revenue, cash receipts from non-assessed taxes on earnings were down by 6.2% in December 2018. Overall, the trend in revenue from non-assessed taxes on earnings was very volatile over the course of the year. The cumulative result provides a more solid basis for analysis: cash receipts from non-assessed taxes on earnings were up by 10.8% on the year in fiscal year 2018.

Final withholding tax on interest and capital gains

Revenue from final withholding tax on interest and capital gains saw a sharp year-on-year drop of 54.2% in December 2018, likely due to a decline in tax revenue from capital gains. Cash receipts from final withholding tax on interest and capital gains were down by 6.0% in fiscal year 2018.

Value added taxes (VAT)

The yield from value added taxes posted a rise of 9.0% on the year in December 2018. Receipts from domestic VAT surged by 10.5%, while import VAT revenue climbed by 4.7%. Cash receipts from VAT in fiscal year 2018 were up by 3.7%, reflecting robust consumption throughout the overall economy.

Taxes accruing to the Federation

In December 2018, revenue from federal taxes was 0.7% below last year’s level due to year-on-year drops in revenue from electricity duty (-20.4%) and motor vehicle tax (-4.4%). However, solidarity surcharge and alcohol duty posted year-on-year revenue gains in December 2018 (up by 1.1% and 13.8%, respectively). Trends in revenue from other taxes had only a minor impact on the overall results for federal taxes. For fiscal year 2018 as a whole, revenue from federal taxes was up by 8.7% in year-on-year terms, though refunds of nuclear fuel duty totalling €7.3bn in 2017 distort the year-on-year comparison.

Taxes accruing to the Länder

The yield from taxes accruing solely to the Länder was up by 12.0% on the year in December 2018. This outcome was driven mainly by higher receipts from inheritance tax (up by 30.8%) and real property transfer tax (up by 7.6%). Revenue gains were also recorded for fire protection tax (up by 1.4%). Receipts from beer duty were down 31.9% on the year.

Borrowing and guarantees

Debt trends for the Federation and its special funds (in €m)

Debt level

Borrowing
(increase)

Debt repayment
(decrease)

Debt level 

Change in debt level
(balance)

30 November 2018

December 2018

December 2018

31 December 2018

December 2018

Budget borrowing

1,086,349

4,142

-20,337

1,070,154

-16,195

broken down by purpose

Federal budget

1,044,626

2,022

-18,172

1,028,475

-16,150

Financial Market Stabilisation Fund

22,618

810

-815

22.613

-5

Investment and Redemption Fund

19,105

1,311

-1,350

19,066

-39

broken down by debt type

Federal securities

1,073,829

4,142

-20,037

1,057,934

-15,895

Federal bonds

710,570

-462

-

710,108

-462

30-year federal bonds

217,986

-39

-

217,947

-39

10-year federal bonds

492,584

-423

-

492,161

-423

Inflation-linked federal securities

64,666

-19

-

64,647

-19

30-year inflation-linked federal bonds

7,718

5

-

7,723

5

10-year inflation-linked federal bonds

56,948

-24

-

56,924

-24

Federal notes

182,448

400

-

182,847

400

Federal Treasury notes

96,776

2,233

-13,000

86,009

-10,767

Treasury discount papers issued by the Federation

17,979

1,991

-7,021

12,949

-5,030

Other federal securities

1,390

-

-16

1,374

-16

Securitised loans

8,045

-

-300

7,745

-300

Other loans and ordinary debts

4,475

-

-

4,475

-

broken down by maturity

up to one year

155,322

 

 

150,466

-4,855

one to four years

342,066

 

 

330,652

-11,414

over four years

588,962

 

 

589,036

75

Additional information 1

Liabilities from the indexing of inflation-linked federal securities

4,968

 

 

5,139

172

Reserves in accordance with the Final Payment Financing Act (Schlusszahlungsfinanzierungsgesetz)

3,516

 

 

3,516

-

Guarantees

  

Authorised

amount

Amount allocated

as of 31 December 2018

Amount allocated

as of 31 December 2017

in €bn

Export credit guarantees

153.0

120.7

121.0

Loans to foreign debtors, foreign direct investment, EIB loans

65.0

42.7

44.3

Financial cooperation projects

28.5

22.8

19.6

Food stockpiling

0.7

0.0

0.0

Domestic guarantees

158.0

104.7

103.1

International financial institutions

66.0

60.1

60.1

Treuhandanstalt successor organisations

1.0

1.0

1.0

Interest compensation guarantees

15.0

15.0

15.0

Calendar

Publication schedule
Monthly report Reporting period Publication date

February 2019 issue

January 2019

21 February 2019

March 2019 issue

February 2019

21 March 2019

April 2019 issue

March 2019

23 April 2019

May 2019 issue

April 2019

20 May 2019

June 2019 issue

May 2019

20 June 2019

July 2019 issue

June 2019

22 July 2019

August 2019 issue

July 2019

22 August 2019

September 2019 issue

August 2019

20 September 2019

October 2019 issue

September 2019

21 October 2019

November 2019 issue

October 2019

21 November 2019

December 2019 issue

November 2019

20 December 2019

Key dates on the fiscal and economic policy agenda

11–12 February 2019

Eurogroup and ECOFIN Council meetings in Brussels

11–12 March 2019

Eurogroup and ECOFIN Council meetings in Brussels

11–12 April 2019

Meeting of G20 finance ministers and central bank governors in Washington, D.C.

12–14 April 2019

Spring Meetings of the IMF and World Bank in Washington, D.C.

16–17 May 2019

Eurogroup and ECOFIN Council meetings in Brussels