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31 January 2020

Overview of fed­er­al bud­getary and fi­nan­cial da­ta up to and in­clud­ing De­cem­ber 2019

Translated extracts from the Federal Ministry of Finance’s January 2020 monthly report.

Tax revenue in December 2019

2019 trends in tax revenue (excluding local authority taxes)

Total tax revenue (excluding local authority taxes) was up by 2.5% on the year in December 2019. This increase was mainly driven by higher receipts from joint taxes. Revenue from assessed income tax again provided a positive surprise in December, an important month for receipts from this tax. In contrast, growth in revenue from corporation tax was far more subdued in December, the fourth high-yield month for this tax in 2019. Receipts from wages tax also made a significant contribution to overall tax revenue, even if revenue growth for this tax was less dynamic than in previous months. Revenue from non-assessed taxes on earnings also posted substantial year-on-year gains. Receipts from final withholding tax on interest and capital gains were also up on the year, compared with a low baseline in December 2018. The take from value added taxes rose moderately, while receipts from taxes that accrue solely to the Federation were slightly down on the year in December. Receipts from taxes accruing to the Länder posted a marked increase of 17.6%.

EU own resources

Transfers of own resources to the EU, including customs duties, totalled approximately €1.5bn in December 2019, a year-on-year drop of 54.8%. This was due to lower transfers of GNI-based and VAT-based own resources in December 2019, because large transfers for agricultural payments in February 2019 were balanced out over the course of the year. Monthly fluctuations occur over the course of the year based on the EU’s financing needs at any given time.

Cumulative overview for fiscal year 2019

In fiscal year 2019, total tax receipts increased by 3.1% on the year. Revenue from joint taxes grew by 3.4%. Taxes accruing to the Federation posted an increase of 0.9%, while taxes accruing to the Länder were up by 8.1%.

Distribution among the Federation, Länder and local authorities

The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) rose by 7.8% on the year in December 2019. This was the result of a 5.2% increase in revenue from the Federation’s share of joint taxes. Here it should be noted that shifts in VAT revenue between the Federation and the Länder distorted the year-on-year trend in December 2019. New legislation was adopted in December 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. In December 2019, too, the Federation provided around €399m to the Länder and local authorities for refugee-related costs and €493m for costs related to improving the quality of childcare provision. However, the total of these one-time payments was around €700m lower than in December 2018. This has the effect of increasing revenue in 2019 in comparison with the same period of 2018. Overall, the percentage of joint tax revenue that is allocated to the Federation was smaller in 2019 than in 2018. In addition, transfers of own resources to the EU were lower, as described above. Lower revenue from federal taxes had a slight negative impact on overall results.

Länder tax receipts were up by 1.3% on the year in December. This gain was driven mainly by receipts from the share of joint taxes allocated to the Länder, which were up by 0.5% on the year, partly due to the higher percentage of VAT revenue that went to the Länder in 2019. Receipts from taxes that accrue only to the Länder were also up tangibly on the year in December, by 17.6%. The share of revenue from joint taxes allocated to local authorities was 4.7% higher than in December 2018.

Joint taxes

Wages tax

Wages tax receipts grew in December 2019, with gross revenue up by 3.9% compared with December 2018. Child benefit payments, which are financed from wages tax receipts, rose by 7.6% on the year due to a €10 per child increase in monthly child benefit from July onwards. On balance, cash receipts from wages tax rose by 3.4% on the year in December 2019. Taken cumulatively, cash receipts from wages tax were up strongly, by 5.5% on the year, in fiscal year 2019.

Corporation tax

Gross receipts from corporation tax posted a relatively modest year-on-year increase of 0.5% in December, the important fourth prepayments month in 2019. Taxpayer paybacks of investment allowance slightly exceeded payouts in December. However, this had only a negligible impact on results. On balance, cash receipts were up by 0.6% on the year in December. Cumulative cash receipts from corporation tax fell by 4.2% in year-on-year terms in fiscal year 2019.

Assessed income tax

Gross receipts from assessed income tax posted a surprisingly strong year-on-year increase of 6.6% in December, the fourth prepayments month of the year. Overall, gross revenue from this tax showed positive growth in fiscal year 2019. Employee refunds were up by 5.2% on the year in December; 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 increased by 6.6% in December 2019 over the same period in 2018. In cumulative terms, cash receipts from assessed income tax were up notably, by 5.5% on the year, in 2019.

Non-assessed taxes on earnings

December 2019 saw a 6.4% year-on-year rise in gross receipts from non-assessed taxes on earnings. Taking into account a 47.2% 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 5.2%. Cash receipts from non-assessed taxes on earnings were up by 1.3% on the year in fiscal year 2019.

Final withholding tax on interest and capital gains

Revenue from final withholding tax on interest and capital gains recorded year-on-year growth of 8.1% in December 2019. However, this large increase was due to a low baseline figure in 2018. Cash receipts from final withholding tax on interest and capital gains were down by 25.3% in fiscal year 2019 compared with 2018. 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 in 2019 than they did in 2018.

Value added taxes

Receipts from value added taxes were up by 1.9% on the year in December 2019. Domestic VAT revenue rose by 3.8% in year-on-year terms, while receipts from import VAT declined by 3.8%. Cumulative cash receipts from value added taxes recorded a year-on-year gain of 3.6% in fiscal year 2019.

Taxes accruing to the Federation

In December 2019, revenue from taxes accruing solely to the Federation was down by 1.1% on the year. Receipts from tobacco duty fell by 21.5% in year-on-year terms. However, this was due to a revenue shift from December 2019 to January 2020 for accounting reasons. Revenue from aviation tax and energy duty fell by 7.0% and 0.6% respectively. Receipts from the solidarity surcharge climbed by 4.1% on the year thanks to growth in revenues from income and corporation tax (which constitute its tax base). Receipts from motor vehicle tax and insurance tax also posted substantial gains, up by 15.8% and 2.9%, respectively. Trends in revenue from other taxes had only a minor impact on the overall results for federal taxes.

Taxes accruing to the Länder

Revenue from taxes accruing solely to the Länder increased significantly in December 2019, by 17.6% on the year. This was driven by a surge in revenue from real property transfer tax, which was up by 28.4%. Other taxes accruing solely to the Länder also posted year-on-year revenue growth in December, including fire protection tax (+3.7%), inheritance tax (+0.7%), beer duty (+22.9%) and betting and lottery tax (+10.2%).

Borrowing and guarantees

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

Guarantees
 

Authorised amount

Amount allocated
as of

31 December 2019

Amount allocated
as of

31 December 2018

in € bn

Export credit guarantees

148.0

119.4

120.7

Loans to foreign debtors, foreign direct investment, EIB loans

58.0

42.8

42.7

Financial cooperation projects

28.5

25.6

22.8

Food stockpiling

0.7

0.0

0.0

Domestic guarantees

125.0

115.8

104.7

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

Calendar

Publication schedule1 of the monthly reports 
Monthly reportReporting periodPublication date
February 2020 issueJanuary 202021 February 2020
March 2020 issueFebruary 202020 March 2020
April 2020 issueMarch 202021 April 2020
May 2020 issueApril 202022 May 2020
June 2020 issueMay 202019 June 2020
July 2020 issueJune 202021 July 2020
August 2020 issueJuly 202020 August 2020
September 2020 issueAugust 202022 September 2020
October 2020 issueSeptember 202022 October 2020
November 2020 issueOctober 202020 November 2020
December 2020 issueNovember 202022 December 2020
Key dates on the fiscal and economic policy agenda

17–18 February 2020

Eurogroup and ECOFIN Council meetings in Brussels

22–23 February 2020

Meeting of G20 finance ministers and central bank governors in Riyadh, Saudi Arabia

16–17 March 2020

Eurogroup and ECOFIN Council meetings in Brussels

16–17 April 2020

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

17–19 April 2020

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

24–25 April 2020

Eurogroup and informal ECOFIN meetings in Zagreb, Croatia