- Federal budget trends up to and including June 2019
- Trends in federal expenditure by function
- Trends in federal expenditure by economic category
- Trends in federal revenue
- Tax revenue in June 2019
- Borrowing and guarantees
Federal budget trends up to and including June 2019
|Actual 2018||2019 target||Actual1 June 2019|
|Tax revenue (€bn)||322.4||325.5||155.6|
Fiscal balance (€bn)
Financing/use of surplus
|Net borrowing5 (€bn)||0.0||0.0||-79.6|
|Any discrepancies in totals are due to rounding.|
|1 As per accounts.|
2 With the exception of expenditure on the repayment of debt incurred on the credit market, allocations to reserves
and expenditure made to cover a cash deficit. Excluding expenditure from internal offsetting.
3 With the exception of revenue from loans on the credit market, withdrawals from reserves, revenue from cash
surpluses and seigniorage. Excluding revenue from internal offsetting.
|4 Negative values denote accumulation of reserves.|
|5 (-) debt repayment; (+) borrowing|
|Source: Federal Ministry of Finance|
Federal revenue in the first half of 2019 totalled €169.9bn, up by 0.4% (approximately €0.6bn) on the year. Tax revenue (including transfers of EU own resources to the EU) declined by 0.9% (approximately €1.4bn), mainly due to the fact that Germany transferred around €4.4bn more in GNI-based own resources to the EU than it did in the first six months of 2018.
Other revenue was up by 16.1% (approximately €2bn) on the year in the January–June period. This was mainly due to an increase in allocations from the Bundesbank’s profits – allocations so far this year have totalled €2.4bn, an increase of approximately €0.5bn on the year.
Federal expenditure in the first six months of 2019 totalled €172.5bn, up by 8.5% (roughly €13.5bn) on the year. Federal spending is separated into consumption and investment spending.
The spending increase in the January–June period was mainly due to a year-on-year rise of 8.5% (approximately €12.5bn) in consumption spending. Ongoing grants to public administrations recorded a considerable year-on-year rise of 4.7%. In contrast, ongoing grants for pensions and benefits were 1.3% lower than in June 2018 due in particular to a 2.7% fall in spending on basic income support for jobseekers. Up by €2.4bn (3.6%) on the year, subsidies to social security funds made up a significant share of the increase in consumption spending in absolute year-on-year terms. Interest expenditure makes up the largest share, with an increase of 73.2% (approximately €5.1bn). However, this stems from accounting technicalities and does not, in terms of the budget year as a whole, indicate an increase in interest payments compared to last year.
Investment spending totalled approximately €13.1bn in June 2019, exceeding the June 2018 figure by 8.1%. This was driven by a 19.6% year-on-year rise in fixed asset investment. Construction spending in particular was up on the year (with spending on federal motorway maintenance increasing by €0.5bn, for example) as was spending for the acquisition of movable assets (+€0.3bn).
The federal budget recorded a deficit of €2.6bn in the first half of 2019.
Revenue and expenditure are subject to strong fluctuations over the course of the fiscal year and thus have an uneven effect on cash funds in individual months. Net borrowing also tends to fluctuate considerably over the course of the year. This means that the fiscal balance at this point in the year and the corresponding net borrowing figures are not reliable indicators of the end-of-year figures for the fiscal balance and net borrowing.
Trends in federal expenditure by function
Trends in federal expenditure by economic category
Trends in federal revenue
Tax revenue in June 2019
Total tax revenue (excluding local authority taxes) was up by 6.8% in June 2019 over the same month last year. Revenue from joint taxes posted a significant increase compared to last year. One striking development was the sharp increase in receipts from value added taxes. Revenue from wages tax rose substantially once again. Revenue from non-assessed taxes on earnings also posted substantial year-on-year gains. Receipts from both corporation tax and assessed income tax rose on the year in June, the second month for prepayments in 2019. Receipts from final withholding tax on interest and capital gains once again posted a significant decline. Revenue from taxes accruing solely to the Federation also recorded a year-on-year decline (-0.8%) due to revenue from tobacco duty being shifted to July 2019. Similarly, taxes accruing to the Länder were down, posting a decline of 7.9%.
EU own resources
Transfers of own resources to the EU, including customs duties, totalled approximately €2.6bn in June 2019, an increase of 54.0% compared with last year. Transfers to the EU are based on the planned financial framework for 2019. The overall volume of the 2019 budget is higher than that of the 2018 budget. In addition, monthly fluctuations occur over the course of the year based on the EU’s financing needs at any given time.
Overview of the first six months of 2019
In the first half of 2019, total tax receipts increased by 3.0% on the year. Revenue from joint taxes rose by 3.2%. Taxes accruing to the Federation recorded a rise of 0.7%, while taxes accruing to the Länder were up 5.1%.
Distribution among the Federation, Länder and local authorities
The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) were up by 4.2% on the year in June 2019. These gains were driven by an increase in revenue from the federal share in joint taxes (+7.6%) owing to gains in revenue from joint taxes in June, despite the percentage of joint taxes accruing to the Federation posting a year-on-year decline. This drop occurred due to legislation adopted in late 2018 which (a) extended 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 Länder saw a 6.9% rise in tax revenue. This gain was based on an increase in revenue from the share of joint taxes allocated to the Länder, partly as a result of the change in VAT revenue distribution. This gain occurred despite a marked year-on-year decline in revenue from Länder taxes. The local authorities’ take from joint taxes was up by 7.9% on the year.
Growth in wages tax revenue continued to be very strong in June 2019, with gross revenue from this tax increasing by 6.2% on the year. This reflected continuing employment growth and rising incomes in Germany. Child benefit payments – which are financed from wages tax receipts – increased by 1.3% on the year. However, it should be noted that the 2018 baseline was understated as a result of statistical problems. On balance, cash receipts from wages tax saw a year-on-year rise of 7.1% in June 2019. Taken cumulatively, cash receipts from wages tax posted a sharp increase (5.9%) on the year in the first half of 2019.
In June, the second of four corporation tax prepayment instalments for 2019 was due. Gross receipts from corporation tax were up by 1.6% on the year. Prepayments for 2019 also continued to rise, as did prepayments resulting from assessments for previous years. However, the deteriorating balance between back payments and refunds meant that the receipts from corporation tax grew at a slower rate. After subtracting investment allowances, cash receipts from corporation tax were up by 1.6% on the year in June 2019. On a cumulative basis, cash receipts from corporation tax fell by 7.7% on the year in the first half of 2019.
Assessed income tax
For this tax, too, the second instalment of prepayments for 2019 fell due in June. The pattern for prepayments for assessed income tax is the same as for corporation tax, with continued growth in prepayments for 2019 and earlier years. Since the balance between back payments and refunds improved – a trend driven, in particular, by a drop in employee refunds – the trend for revenue from assessed income tax was, on the whole, more positive than the trend for revenue from corporation tax. Gross revenue from assessed income tax was up by 5.6% over June 2018. Employee refunds were down 15.9% on the year in June; after these are subtracted from the gross figure (along with investment allowance payments and owner-occupied homes premiums, which are insignificant in terms of amount), net cash receipts from assessed income tax were up on the year by 8.4% in June 2019. In cumulative terms, cash receipts from assessed income tax were up by 3.1% on the year in the first half of 2019.
Non-assessed taxes on earnings
Gross receipts from non-assessed taxes on earnings rose by 38.2% in year-on-year terms in June 2019, following a decline of 34.5% in the previous month. Taking into account a 34.9% increase in refunds paid out by the Federal Central Tax Office, which are financed from this revenue, cash receipts from non-assessed taxes on earnings rose by 38.3%. Overall, the trend in revenue from non-assessed taxes on earnings tends to be very volatile over the course of the year, reflecting dividend distribution dates. The cumulative result provides a more solid basis for analysis: Cash receipts from non-assessed taxes on earnings were up by 11.2% on the year in the first half of 2019.
Final withholding tax on interest and capital gains
Revenue from final withholding tax on interest and capital gains posted a decline of 25.7% on the year in June. In cumulative terms, cash receipts from final withholding tax on interest and capital gains dropped by 40.0% in year-on-year terms in the first half of 2019. There are no statistics breaking down this figure into its two components, but it can be assumed that capital gains made a significantly smaller contribution to overall revenue from this tax than in 2018.
Value added taxes (VAT)
Receipts from value added taxes once again posted a substantial year-on-year gain of 5.3% in June 2019. Receipts from domestic VAT rose by 6.9%, while import VAT revenue increased by 0.9%. Cumulative cash receipts from value added taxes recorded a year-on-year gain of 3.9% in the first half of 2019.
Taxes accruing to the Federation
Down by 0.8%, receipts from federal taxes posted a slight year-on-year drop in June 2019. However, this trend was driven in particular by a shift in revenue from tobacco duty (-14.2%), €370 million of which will not be posted until July, which alters the current results for June. Receipts from electricity duty and motor vehicle tax were down by 12.8% and 6.6% respectively. Receipts from alcohol duty and insurance tax posted substantial increases, up by 25.3% and 5.6% respectively. The solidarity surcharge benefited from growth in revenue from those taxes which the surcharge is levied on and saw an increase of 5.7% compared to June 2018. Trends in revenue from other taxes had only a minor impact on the overall results for taxes accruing to the Federation.
Taxes accruing to the Länder
Revenue from taxes accruing solely to the Länder fell by 7.9% on the year in June 2019 due to declines in inheritance tax (-21.3%) and betting and lottery tax (-7.6%). Receipts from beer duty posted a year-on-year decline of 18.8% due to ongoing refunds triggered by the European Court of Justice’s judgment of 17 May 2018 (C-30/17) on flavoured beer and mixed beverages containing beer. Receipts from real property transfer tax were up 0.3% on the year. Receipts from fire protection tax posted a year-on-year increase of 6.4%.
Borrowing and guarantees
as of 30 June 2019
as of 30 June 2018
|Export credit guarantees||148.0||119.0||118.5|
|Loans to foreign debtors, foreign direct investment, EIB loans||58.0||44.5||43.0|
|Financial cooperation projects||28.5||23.5||20.7|
|International financial institutions||80.0||60.1||60.1|
|Treuhandanstalt successor organisations||1.0||1.0||1.0|
|Interest compensation guarantees||15.0||15.0||15.0|
|Monthly report||Reporting period||Publication date|
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|
1 In accordance with the IMF’s Special Data Dissemination Standard Plus (SDDS Plus); see http://dsbb.imf.org
Source: Federal Ministry of Finance
|26–27 August 2019||Meeting of German-speaking finance ministers in Luxembourg|
|13–14 September 2019||Eurogroup and informal ECOFIN meetings in Helsinki, Finland|
|9–10 October 2019||Eurogroup and ECOFIN Council meetings in Luxembourg|
|17–18 October 2019||Meeting of G20 finance ministers and central bank governors in Washington, D.C.|
|18–20 October 2019||Annual meetings of the IMF and World Bank in Washington, D.C.|
|Click here for the full schedule (only in German)|