Inhalt

Federal budget trends up to and including September 2020

Table: Trends in the federal budget

Actual 2019

2020 target1

Actual2
January-September 2020

Expenditure (€bn)3

343.2

508.5

295.8

Year-on-year change in % (year to date)

 

 

+15.4

Revenue (€bn)4

356.5

290.4

223.3

Year-on-year change in % (year to date)

 

 

-12.7

Tax revenue (€bn)

329.0

264.4

202.9

Year-on-year change in % (year to date)

 

 

-13.6

Balance of pass-through funds (€bn)

0.0

0.0

0.0

Fiscal balance (€bn)

13.3

-218.1

-72.5

Financing/use of surplus:

-13.3

218.1

72.5

Cash resources (€bn)

-

-

-12.7

Seigniorage (€bn)

0.2

0.3

0.2

Movements in reserves5 (€bn)

-13.5

0.0

0.0

Net borrowing6 (€bn)

0.0

217.8

85.1

Any discrepancies in totals are due to rounding.

1 Second supplement to the Federal budget for 2020 (Federal Law Gazette I No 35, p. 1669).

2 As per accounts.

3 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.

4 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.

5 Negative values denote accumulation of reserves.

6 (-) debt repayment; (+) borrowing

Source: Federal Ministry of Finance

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Revenue

Federal revenue for the period from January to September 2020 totalled approximately €223.3bn, down by 12.7% (approximately €32.4bn) on the year. This decline is due primarily to the effects of the Covid-19 pandemic and the associated tax-related assistance measures that have been adopted to help manage the crisis. Tax receipts (including transfers of own resources to the EU) declined by 13.6% (roughly €31.9bn) compared with the first nine months of 2019. Receipts from value added taxes as well as from income and corporation tax have been particularly affected, falling by €15.8bn and €12.4bn, respectively.

The category of “other revenue” was down by 2.4% (roughly €0.5bn) on the year in the January–September period. This can be attributed to lower revenue from business activities as well as from claims arising from guarantees.

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Expenditure

By adopting two supplementary budgets, the German government has taken decisive action in response to the challenges posed by the coronavirus pandemic both to health and to the economy. The additional expenditure contained in these two supplementary budgets now strongly influences the structure of federal spending. Expenditure in the first nine months of 2020 totalled €295.8bn, up by 15.4% (about €39.4bn) over the same period last year. A breakdown by economic category shows that the increase in spending during the January–September period was due mainly to growth in consumption spending, which was up by 15.5% (approximately €36.4bn) on the year. Ongoing subsidies to companies made up most of the increase. By the end of September 2020, approximately €14.5bn in immediate assistance for small companies and self-employed individuals affected by the fallout from the Covid-19 pandemic had been disbursed, out of the €18.0bn earmarked for this purpose in the second supplementary budget 2020. Approximately €4.9bn in additional funds for ongoing grants to social institutions to fight the coronavirus have been spent (2020 target: €9.1bn). In addition, ongoing grants to public administrations were significantly higher than in the same period of 2019. This category includes roughly €8.8bn in compensation payments under section 21 of the Hospital Financing Act (Krankenhausfinanzierungsgesetz), out of the €11.5bn earmarked for this purpose for 2020. Grants to social security funds were up by €8.4bn (8.4%) on the year. This includes disbursements to the health fund and the long-term care insurance compensation fund totalling €5.3bn, the entire amount earmarked for these funds. The increase in consumption spending was tempered by a decline in interest expenditure, which was down by 55.4% (about €6.8bn) on the year.

Investment spending totalled approximately €25.2bn in the January–September period, an increase of 13.6% (roughly €3.0bn) over the same period last year. This was mainly due to liquidity assistance (totalling roughly €3.9bn so far this year) provided to the Federal Employment Agency. Investment grants from January to September 2020 declined due to a special factor: the compensation payments from the Federation to the Länder, for social housing among other things, have been discontinued due to a reorganisation of financial relations between the federal government and the Länder that took effect at the start of 2020. Instead of receiving compensation payments, the Länder now receive a higher share of VAT revenue. In the January–September 2020 period, spending on the acquisition of movable assets was up by 23.0%, (about €0.3bn) on the year. Spending on construction projects was slightly down on the year by 2.1%.

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Fiscal balance

The federal budget recorded a deficit of €72.5bn for the period from January to September 2020.

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 any given 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. This is especially the case in the current circumstances.

 

Trends in federal expenditure by function

Trends in federal expenditure by function

Actual 2019

2020 target1

Actual

Year-on-year change
(year to date)

January to September 2019

January to September 2020

in €m

share in %

in €m

share in %

in €m

in %

General public services

88,153

 25.7

98,029

 19.3

60,845

64,328

+5.7

Economic cooperation and development

9,994

 2.9

12,326

 2.4

4,985

5,910

+18.6

Defence

41,944

 12.2

45,292

 8.9

29,590

30,867

+4.3

Government, central administration

18,561

 5.4

20,611

 4.1

14,190

14,580

+2.7

Revenue administration

5,115

 1.5

5,612

 1.1

3,756

3,896

+3.7

Education, science, research, cultural affairs

23,825

 6.9

30,316

 6.0

14,812

15,668

+5.8

Support for school and university students and training programme participants

3,367

 1.0

6,417

 1.3

2,308

2,573

+11.5

Science, research and development outside of higher education institutions

13,567

 4.0

16,237

 3.2

7,999

8,623

+7.8

Social security, family affairs and youth, labour market policy

177,133

 51.6

25.5435

 50.2

140,033

170,045

+21.4

Social insurance including unemployment insurance

118,997

 34.7

132,543

 26.1

96,132

103,173

+7.3

of which:

 

 

 

 

 

 

 

General pension insurance

89,156

 26.0

93,047

 18.3

72,938

76,065

+4.3

Labour market policy

36,427

 10.6

49,180

 9.7

27,100

27,928

+3.1

of which:

 

 

 

 

 

 

 

Basic income support for jobseekers under Book II of the Social Code

20,025

 5.8

26,400

 5.2

15,419

15,810

+2.5

Government housing and heating allowances under Book II of the Social Code

6,458

 1.9

12,400

 2.4

4,906

5,092

+3.8

Family assistance, welfare services, etc.

9,252

 2.7

10,619

 2.1

7,007

7,766

+10.8

Social benefits for the consequences of war and political events

1,902

 0.6

1,947

 0.4

1,629

1,641

+0.7

Health, environment, sport, recreation

2,967

 0.9

25,255

 5.0

1,720

15,741

+815.3

Housing, urban development, regional planning and local community services

3,194

 0.9

2,576

 0.5

2,070

902

 -56.4

Housing, home ownership savings premium

2,380

 0.7

1,425

 0.3

1,800

619

 -65.6

Food, agriculture and forestry

1,262

 0.4

2,044

 0.4

566

537

 -5.2

Energy and water management, trade and services

4,026

 1.2

15,393

 3.0

2,840

4,032

+42.0

Regional support measures

948

 0.3

3,071

 0.6

425

671

+57.8

Mining, manufacturing and construction

1,211

 0.4

2,993

 0.6

1,159

2,198

+89.7

Transport and communication

22,243

 6.5

28,925

 5.7

14,652

14,225

 -2.9

Roads

10,888

 3.2

10,125

 2.0

7,154

6,018

 -15.9

Railways and public transport

6,794

 2.0

13,927

 2.7

4,242

4,844

+14.2

Financial management

20,382

 5.9

50,558

 9.9

18,891

10,338

 -45.3

Interest expenditure and borrowing-related expenditure

12,084

 3.5

9,566

 1.9

12,343

5,549

 -55.0

Total expenditure2

343,186

 100.0

508,530

 100.0

256,429

295,816

+15.4

1 Second supplement to the Federal budget for 2020 (Federal Law Gazette I No 35, p. 1669).

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.

Source: Federal Ministry of Finance

 

Trends in federal expenditure by economic category

Trends in federal expenditure by economic category

Actual 2019

2020 target1

Actual

Year-on-year change
(year to date)

January to September 2019

January to September 2020

in €m

share in %

in €m

share in %

in €m

in %

Consumption expenditure

305,120

88.9

439,587

86.4

234,224

270,587

+15.5

Human resources expenditure

34,185

10.0

35,413

7.0

26,314

26,726

+1.6

Salary payments

25,066

7.3

26,237

5.2

19,039

19,438

+2.1

Pensions

9,119

2.7

9,175

1.8

7,275

7,289

+0.2

Operating expenditure

33,135

9.7

39,150

7.7

21,110

22,472

+6.5

Maintenance of immovable property

1,729

0.5

1,637

0.3

1,183

1,215

+2.7

Military procurement

14,098

4.1

17,156

3.4

8,364

9,340

+11.7

Other

17,308

5.0

20,357

4.0

11,564

11,917

+3.1

Interest expenditure

11,911

3.5

9,557

1.9

12,334

5,506

 -55.4

Ongoing grants and subsidies

224,963

65.6

353,997

69.6

173,594

214,892

+23.8

to public administrations

27,739

8.1

79,516

15.6

21,508

30,819

+43.3

to other areas

197,224

57.5

274,480

54.0

152,086

184,073

+21.0

of which:

 

 

 

 

 

 

 

Companies

29,955

8.7

77,473

15.2

21,210

37,044

+74.7

Pensions, benefits, etc.

29,150

8.5

36,588

7.2

22,468

23,469

+4.5

Social security funds

125,225

36.5

134,322

26.4

100,399

108,844

+8.4

Other asset transfers

926

0.3

1,471

0.3

873

991

+13.5

Investment expenditure

38,066

11.1

71,286

14.0

22,205

25,229

+13.6

Financial assistance

26,882

7.8

56,492

11.1

15,159

18,105

+19.4

Grants and subsidies

25,315

7.4

33,782

6.6

14,425

13,673

 -5.2

Loans, guarantees

794

0.2

16,585

3.3

499

4,424

+786.6

Acquisition of holdings; capital contributions

774

0.2

6,125

1.2

235

9

 -96.2

Fixed asset investment

11,183

3.3

14,794

2.9

7,046

7,124

+1.1

Construction projects

8,095

2.4

8,904

1.8

5,223

5,111

 -2.1

Acquisition of movable assets

2,281

0.7

5,128

1.0

1,332

1,638

+23.0

Acquisition of real property

807

0.2

761

0.1

491

375

 -23.6

General reduction/increase in expenditure

0

0.0

-2,344

-0.5

0

0

X

Total expenditure2

343,186

100.0

508,530

100.0

256,429

295,816

+15.4

1Second supplement to the Federal budget for 2020 (Federal Law Gazette I No 35, p. 1669).

2With 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.

Source: Federal Ministry of Finance

 

Trends in federal revenue

Trends in federal revenue

Actual 2019

2020 target1

Actual

Year-on-year change
(year to date)

January to September 2019

January to September 2020

in €m

share in %

in €m

share in %

in €m

in %

Tax revenue

328,989

92.3

264,446

91.1

234,814

202,883

 -13.6

Federal share of joint taxes:

271,275

76.1

221,000

76.1

199,168

170,843

 -14.2

Income tax and corporation tax
(incl. final withholding tax on interest and capital gains)

150,384

42.2

133,108

45.8

109,538

97,188

 -11.3

of which:

 

 

 

 

 

Wages tax

93,311

26.2

90,206

31.1

65,628

60,685

 -7.5

Assessed income tax

27,078

7.6

20,230

7.0

20,033

18,205

 -9.1

Non-assessed tax on earnings

11,724

3.3

10,500

3.6

9,736

7,919

 -18.7

Final withholding tax on interest and capital gains

2,264

0.6

2,772

1.0

1,698

2,252

+32.6

Corporation tax

16,007

4.5

9,400

3.2

12,443

8,127

 -34.7

Value added taxes (VAT)

118,944

33.4

86,380

29.7

88,553

72,786

 -17.8

Trade tax apportionment paid to Federation and Länder

1,947

0.5

1,512

0.5

1,076

869

 -19.2

Energy duty

40,683

11.4

34,600

11.9

25,304

23,068

 -8.8

Tobacco duty

14,257

4.0

14,350

4.9

9,750

10,164

+4.2

Solidarity surcharge

19,646

5.5

17,700

6.1

14,560

13,530

 -7.1

Insurance tax

14,136

4.0

14,580

5.0

11,855

12,188

+2.8

Electricity duty

6,689

1.9

5,990

2.1

4,944

4,793

 -3.1

Motor vehicle tax

9,372

2.6

9,495

3.3

7,337

7,426

+1.2

Alcohol duty including alcopops duty

2,119

0.6

2,115

0.7

1,580

1,533

 -3.0

Coffee duty

1,060

0.3

1,035

0.4

771

753

 -2.3

Aviation tax

1,182

0.3

300

0.1

837

226

 -73.0

Sparkling wine duty and intermediate products duty

403

0.1

390

0.1

307

289

 -5.9

Other taxes accruing to the Federation

2

0.0

1

0.0

2

1

 -50.0

Deductions

 

 

 

 

 

 

 

Consolidation assistance for the Länder

800

X

1,067

X

800

1,067

+33.4

Supplementary grants to Länder

7,555

X

8,674

X

5,820

6,530

+12.2

EU own resources (GNI-based)

23,317

X

26,720

X

19,664

16,399

 -16.6

EU own resources (VAT-based)

2,520

X

2,700

X

2,086

1,975

 -5.3

Grants to Länder for public transport

8,651

X

8,957

X

6,488

9,217

+42.1

Grants to Länder for motor vehicle tax and HGV toll

8,992

X

8,992

X

6,744

6,744

+0.0

Other revenue

27,502

7.7

25,980

8.9

20,916

20,418

 -2.4

Revenue from economic activity

6,376

1.8

6,699

2.3

5,504

5,055

 -8.2

Interest revenue

309

0.1

262

0.1

214

251

+17.3

Loan repayments, holdings, privatisation proceeds

2,026

0.6

1,379

0.5

1,496

913

 -39.0

Total revenue2

356,492

100.0

290,426

100.0

255,730

223,301

 -12.7

1Second supplement to the Federal budget for 2020 (Federal Law Gazette I No 35, p. 1669).

2With the exception of revenue from loans on the credit market, withdrawals from reserves, revenue from cash surpluses and seigniorage. Excluding revenue from internal offsetting.

Source: Federal Ministry of Finance

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Tax revenue in September 2020

 

2020 trends in tax revenue (excluding local authority taxes)

2020 trends in tax revenue (excluding local authority taxes)1

2019

September

Year-on-year
change 

January to September

Year-on-year
change  

2020 estimates4

Year-on-year
change

in €m

in %

in €m

in %

in €m

in %

Joint taxes

 

 

 

 

 

 

Wages tax2

12,521

 -23.9

151,620

 -4.7

207,600

 -5.5

Assessed income tax

14,001

 -5.0

42,836

 -9.1

53,450

 -16.1

Non-assessed taxes on earnings

996

 -13.0

15,876

 -18.5

20,000

 -14.8

Final withholding tax on interest and capital gains
(including the former withholding tax on interest income)

468

+43.7

5,117

+32.6

6,400

+24.4

Corporation tax

5,664

 -25.2

16,254

 -34.7

19,700

 -38.5

Value added taxes

18,229

 -12.8

164,141

 -9.1

218,650

 -10.1

Trade tax apportionment paid to Federation and Länder

1

+171.3

2,097

 -19.3

3,697

 -21.3

Increased trade tax apportionment

0

 -97.0

113

 -93.9

0

X

Total joint taxes

51,881

 -15.2

398,054

 -9.4

529,497

 -11.1

Taxes accruing to the Federation

 

 

 

 

 

 

Energy duty

3,497

 -4.7

23,068

 -8.8

37,150

 -8.7

Tobacco duty

1,035

+12.2

10,164

+4.2

14,350

+0.7

Alcohol duty

188

+8.2

1,523

 -3.6

2,000

 -5.6

Insurance tax

700

+4.4

12,188

+2.8

14,580

+3.1

Electricity duty

453

 -16.2

4,793

 -3.1

6,500

 -2.8

Motor vehicle tax

773

+12.1

7,426

+1.2

9,450

+0.8

Aviation tax

22

 -79.7

226

 -73.0

300

 -74.6

Solidarity surcharge

2,064

 -8.2

13,530

 -7.1

18,050

 -8.1

Other taxes accruing to the Federation

121

+5.1

1,053

 -2.6

1,426

 -2.8

Total taxes accruing to the Federation

8,853

 -3.1

73,971

 -4.2

103,806

 -5.2

Taxes accruing to the Länder

 

 

 

 

 

 

Inheritance tax

837

+53.3

6,396

+23.3

8,000

+14.5

Real property transfer tax

1,268

 -2.3

11,821

+2.2

14,200

 -10.1

Betting and lottery tax

171

+8.5

1,477

 -0.7

1,965

 -0.5

Beer duty

72

+38.0

405

 -13.8

500

 -19.0

Other taxes accruing to the Länder

39

+4.7

417

+6.4

510

+5.8

Total taxes accruing to the Länder

2,388

+14.2

20,516

+7.4

25,175

 -2.6

EU own resources

 

 

 

 

 

 

Customs duties

399

 -12.8

3,476

 -8.7

4,650

 -8.6

EU own resources (VAT-based)

173

 -16.9

1,975

 -5.3

2,479

 -1.6

EU own resources (GNI-based)

1,595

 -19.2

16,399

 -16.6

25,180

+8.0

Total EU own resources

2,167

 -17.9

21,849

 -14.5

32,309

+4.5

Federation3

26,975

 -17.7

206,683

 -12.7

275,347

 -16.3

Länder3

29,514

 -7.7

231,148

 -3.5

306,507

 -5.5

EU

2,167

 -17.9

21,849

 -14.5

32,309

+4.5

Local authorities’ share of income tax and value added tax

4,864

 -10.6

36,337

 -3.4

48,964

 -4.7

Total tax revenue (excluding local authority taxes)

63,521

 -12.8

496,017

 -8.1

663,128

 -9.9

1Methodology: Total cash income from the various taxes is recorded and allocated to the various government levels as stipulated by law. Tax amounts actually received in the current month by individual government levels may differ from the target amounts for technical reasons.

2After deduction of child benefit refunds by the Federal Central Tax Office

3After supplementary grants; any discrepancies with the table on trends in federal revenue are due to the methodology used (see footnote 1).

4Results of the Working Party on Tax Revenue Estimates of September 2020.

Source: Federal Ministry of Finance

Total tax revenue (excluding local authority taxes) in September 2020 was down by 12.8% compared with the same month last year. The economic effects of the coronavirus pandemic continued to have a negative impact on tax revenue. As in previous months, virus-related measures taken on the basis of secondary legislation have led to a significant decline in tax revenue. In September, incoming payments of previously deferred taxes exceeded the amount of newly granted deferrals, and this had a positive impact on revenue. At the same time, many taxpayers took advantage of the option to reduce their prepayments, and this led in turn to lower receipts from corporation tax and assessed income tax in September (a month when prepayments are due).

Furthermore, statutory measures to mitigate the effects of the coronavirus pandemic and to stimulate the economy also led to considerable revenue losses in September. Two measures adopted as part of the Second Coronavirus Tax Assistance Act (Zweites Corona-Steuerhilfegesetz) played a particularly important role in this respect: First, cuts in VAT rates have led to a decline in VAT receipts. This decline first showed up on government accounts in September. Second, the disbursement of initial €200 instalments of a one-time bonus for families with children – which is financed from wages tax receipts – contributed significantly to a large decline in wages tax revenue in September.

In September 2020, receipts from joint taxes were down by 15.2% on the year. Revenue from taxes accruing solely to the Federation declined by 3.1%. In contrast, revenue from taxes accruing solely to the Länder was up by 14.2% on the year due to a sharp increase in receipts from inheritance tax.

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EU own resources

Transfers of own resources to the EU, including customs duties, totalled approximately €2.2bn in September 2020, down from €2.6bn in September 2019 (a year-on-year decline of 17.9%). Monthly fluctuations occur over the course of the year based on the EU’s financing needs at any given time. However, monthly requisitions are generally in line with the financial framework for the current year.

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Overview of the January–September 2020 period

In the nine months from January to September 2020, total tax receipts fell by 8.1% on the year. Revenue from joint taxes declined by 9.4%, and revenue from taxes accruing solely to the Federation was down by 4.2%. Revenue from taxes accruing solely to the Länder posted a gain of 7.4%.

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Distribution among the Federation, Länder and local authorities

The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) fell by 17.7% on the year in September 2020. The Federation’s take from joint taxes declined by 21.7%. An amendment of the Financial Equalisation Act (Finanzausgleichsgesetz) under the Second Coronavirus Tax Assistance Act reduced the Federation’s share of revenue from value added taxes and increased the shares of the Länder and local authorities accordingly. The purpose of this was to compensate the Länder for their lower tax revenue resulting from (a) the one-time bonus for families with children, which is financed from wages tax revenue, and (b) the temporary reduction in the VAT rate. The reduction in the VAT rate caused revenue from value added taxes to fall significantly overall in September. In the end, the Federation’s take from VAT revenue in September was down by 30.5% on the year. Receipts from taxes accruing solely to the Federation declined by 3.1%. However, supplementary federal grants to the Länder were down on the year, and own resources payments to the EU were significantly lower than in September 2019.

Länder tax receipts recorded a much less sharp decline of 7.7% on the year in September, due to the reallocation of VAT revenue described above. This led to a 3.4% increase in the VAT revenue taken in by the Länder. However, overall Länder receipts from joint taxes were down by 9.4% on the year in September due to the significant declines in revenue from all joint taxes except for final withholding tax on interest and capital gains. The yield from taxes accruing solely to the Länder was up markedly on the year, by 14.2%. The revenue from joint taxes allocated to local authorities was down by 10.6% on the year.

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Joint taxes

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Wages tax

Wages tax revenue posted a sharp decline in September. Gross wages tax revenue itself was down by only 2.8% on the year in September. This drop was largely due to companies’ ongoing use of Germany’s short-time work scheme, which significantly reduces the amount of gross wages and salaries subject to the deduction of wages tax. However, cash receipts from wages tax were down sharply by 23.9% on the year in September, a result driven mainly by the increase in child benefit, which is financed from wages tax revenue. Child benefit payments nearly doubled on the year in September (up by 94.6%) due to the disbursement of initial €200 instalments of a one-time bonus for families with children (the second instalment of €100 will be paid in October). In cumulative terms, cash receipts from wages tax were down by 4.7% on the year in the first nine months of 2020.

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Corporation tax

In September, which is an important month for prepayments, gross revenue from corporation tax declined by 25.6% on the year. The reductions in prepayments granted as part of the tax measures to mitigate the effects of the pandemic played a key role in driving this result. Due to their low volume, investment allowance payments had hardly any influence on receipts. Cash receipts from corporation tax were down by 25.2% on the year in September. On a cumulative basis, year-on-year cash receipts from corporation tax fell by 34.7% in the first nine months of 2020.

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Assessed income tax

September is also an important month for prepayments of assessed income tax. Overall, receipts from assessed income tax fell by 6.4% on the year in September. The reductions in prepayments granted as part of pandemic-related tax measures affected this negative outcome, but played less of a role than in the case of corporation tax. Employee refunds were down by 23.4% on the year in September; 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), cash receipts from assessed income tax fell by 5.0% compared with the same month last year. In cumulative terms, cash receipts from assessed income tax were down by 9.1% on the year in the January–September period.

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Non-assessed taxes on earnings

Gross receipts from non-assessed taxes on earnings were down by 6.3% on the year in September. The economic situation resulting from the coronavirus pandemic has led some companies to reduce this year’s dividend payments. As a result, overall revenue from non-assessed taxes on earnings in 2020 is expected to be lower than in 2019. Refunds by the Federal Central Tax Office, which are financed from this revenue, totalled about €107m. As a result, cash receipts from non-assessed taxes on earnings were down by 13.0% on the year in September. Cumulative cash receipts from non-assessed taxes on earnings fell by 18.5% on the year in the first nine months of 2020.

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Final withholding tax on interest and capital gains

Revenue from final withholding tax on interest and capital gains grew by 43.7% on the year in September 2020. So far this year, monthly revenue from this tax has fluctuated significantly, as economic trends have apparently led investors to realise gains from their investments in securities. Cumulative cash receipts from final withholding tax on interest and capital gains were up by 32.6% on the year in the January–September 2020 period.

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Value added taxes

Receipts from value added taxes fell by 12.8% on the year in September. Receipts from domestic VAT were down by 8.8% on the year, and import VAT receipts were down by 26.3%. September was the first month when the effects of the reduction in VAT rates (which took effect on 1 July 2020) showed up on government accounts. Companies are regularly granted permanent extensions for filing VAT returns and paying VAT. As a result, VAT revenue from July was not remitted by companies to the government until September. The resulting decline in revenue was only partially offset by the positive balance between (a) payments of deferred taxes that had become due and (b) newly granted deferrals. Cumulative cash receipts from value added taxes fell by 9.1% on the year in the January–September period.

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Taxes accruing to the Federation

In September 2020, revenue from taxes accruing solely to the Federation was down by 3.1% compared with the same month last year. In the case of some taxes, the tax measures that were introduced to improve the liquidity of companies resulted in a decline in revenue. In September, revenue gains were recorded for tobacco duty (up by 12.2%), insurance tax (up by 4.4%) and motor vehicle tax (up by 12.1%). In contrast, receipts from energy duty and electricity duty fell by 4.7% and 16.2%, respectively. Global air traffic came to an almost complete halt as a result of the shutdown. This, in combination with tax deferrals, caused aviation tax revenue to plummet by 79.7% on the year in September. The relaxation of measures to fight the pandemic in the summer only led to a slight recovery in revenue from this tax compared with previous months. Receipts from the solidarity surcharge declined by 8.2% due to the reduced revenue from income tax and corporation tax (which constitute its tax base). Trends in revenue from other taxes had only a minor impact on the overall receipts from federal taxes.

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Taxes accruing to the Länder

Receipts from taxes accruing solely to the Länder were up by 14.2% on the year in September 2020. This was driven primarily by a surge in revenue from inheritance tax, which was up by 53.3%. Revenue gains were also recorded for beer duty (up by 38.0%), betting and lottery tax (up by 8.5%) and fire protection tax (up by 4.7%). Real property transfer tax posted a slight decline of 2.3%.

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Borrowing and guarantees

 

Borrowing trends for the Federation in September 2020

Borrowing trends for the Federation in September 2020
in €m

 

 

Debt level

Borrowing
(increase)

Debt repayment
(decrease)

Debt level

Change in debt level
(balance)

Interest

31 August 2020

 September

 September

30 September 2020

September

September

Total

1,262,562

59,057

-39,061

1,282,557

19,996

1,008

broken down by purpose

 

 

 

 

 

 

Federal budget

1,173,693

46,946

-35,579

1,185,060

11,367

1,064

Financial Market Stabilisation Fund
(loans for expenses pursuant to section 9 (1) of the Stabilisation Fund Act (Stabilisierungsfondsgesetz))

22,653

2,186

-2,186

22,653

-

-109

Financial Market Stabilisation Fund
(loans for resolution authorities pursuant to section 9 (5) of the Stabilisation Fund Act)

30,000

-

-

30,000

-

-

Investment and Redemption Fund

15,885

1,296

-1,296

15,885

-

-155

Economic Stabilisation Fund
(loans for recapitalisation measures pursuant to section 22 of the Stabilisation Fund Act)

1,306

121

-

1,427

121

-1

Economic Stabilisation Fund
(loans for KfW pursuant to section 23 of the Stabilisation Fund Act)

19,024

8,508

-

27,532

8,508

209

broken down by debt type

 

 

 

 

 

 

Conventional federal securities

1,194,868

52,598

-39,036

1,208,430

13,562

661

30-year federal bonds

248,466

1,812

-

250,278

1,812

648

10-year federal bonds

540,930

15,080

-16,000

540,010

-920

-191

Federal notes

187,708

3,681

-

191,388

3,681

131

Federal Treasury notes

106,365

4,911

-12,000

99,276

-7,089

67

Treasury discount papers issued by the Federation

111,400

27,114

-11,036

127,478

16,078

5

Inflation-linked federal securities

56,735

409

-

57,144

409

111

30-year inflation-linked federal bonds

8,860

226

-

9,085

226

96

10-year inflation-linked federal bonds

47,876

183

-

48,059

183

15

Green federal securities

-

6,050

-

6,050

6,050

286

Other federal securities

-

-

-

-

-

-

Securitised loans

6,485

-

-25

6,460

-25

-49

Other loans and ordinary debts

4,474

-

-

4,474

-

-

 Source: Federal Ministry of Finance

 

Debt trends for the federal budget and the Federation’s special funds September 2020

Debt trends for the federal budget and the Federation’s special funds September 2020
in €m

 

 

Debt level

Borrowing
(increase)

Debt repayment
(decrease)

Debt level

Change in debt level
(balance)

Interest

31 August 2020

 September

 September

30 September 2020

September

September

Total

1,213,538

50,549

-39,061

1,225,025

11,487

799

broken down by purpose

 

 

 

 

 

 

Federal budget

1,173,693

46,946

-35,579

1,185,060

11,367

1,064

Financial Market Stabilisation Fund
(loans for expenses pursuant to section 9 (1) of the Stabilisation Fund Act (Stabilisierungsfondsgesetz))

22,653

2,186

-2,186

22,653

-

-109

Investment and Redemption Fund

15,885

1,296

-1,296

15,885

-

-155

Economic Stabilisation Fund
(loans for recapitalisation measures pursuant to section 22 of the Stabilisation Fund Act)

1,306

121

-

1,427

121

-1

broken down by debt type

 

 

 

 

 

 

Conventional federal securities

1,145,845

44,090

-39,036

1,150,898

5,054

452

30-year federal bonds

248,466

1,812

-

250,278

1,812

648

10-year federal bonds

526,030

13,480

-16,000

523,510

-2,520

-267

Federal notes

169,808

1,181

-

170,988

1,181

41

Federal Treasury notes

94,365

1,911

-12,000

84,276

-10,089

24

Treasury discount papers issued by the Federation

107,176

25,706

-11,036

121,846

14,670

6

Inflation-linked federal securities

56,735

409

-

57,144

409

111

30-year inflation-linked federal bonds

8,860

226

-

9,085

226

96

10-year inflation-linked federal bonds

47,876

183

-

48,059

183

15

Green federal securities

-

6,050

-

6,050

6,050

286

Other federal securities

-

-

-

-

-

-

Securitised loans

6,485

-

-25

6,460

-25

-49

Other loans and ordinary debts

4,474

-

-

4,474

-

-

Additional information

 

 

 

 

 

 

Liabilities from the indexing of inflation-linked federal securities1

3,923

3,737

-186

 

Reserves in accordance with the Final Payment Financing Act (Schlusszahlungsfinanzierungsgesetz)2

3,465

3,490

26

 

1Liabilities resulting from indexing include the amount by which the original issuance price has increased due to inflation between the start date and the specified reference date.

2In contrast, reserves include only the increases that are noted on coupon payment dates (15 April of every year) (section 4 (1) of the Final Payment Financing Act) and on reopening dates for inflation-linked securities (section 4 (2) of the Final Payment Financing Act).

Any discrepancies in totals are due to rounding.

Source: Federal Ministry of Finance

 

Trends in refinancing the special funds that provide loans to federal public institutions in September 2020

Trends in refinancing the special funds that provide loans to federal public institutions in September 2020
in €m

 

 

Debt level

Borrowing
(increase)

Debt repayment
(decrease)

Debt level

Change in debt level
(balance)

Interest

31 August 2020

 September

 September

30 September 2020

September

September

Total

49,024

8,508

-

57,532

8,508

209

broken down by purpose

Financial Market Stabilisation Fund
(loans for resolution authorities pursuant to section 9 (5) of the Stabilisation Fund Act (Stabilisierungsfondsgesetz))1

30,000

-

-

30,000

-

-

Economic Stabilisation Fund (loans for KfW pursuant to section 23 of the Stabilisation Fund Act)

19,024

8,508

-

27,532

8,508

209

1 Under section 9 (5) of the Financial Market Stabilisation Fund Act, the Federal Ministry of Finance is empowered to borrow up to €30bn for the Financial Market Stabilisation Fund so that the Fund can grant loans to resolution authorities for the purpose of refinancing (as per section 8 (10) of the Financial Market Stabilisation Fund Act) assets that they have taken over. Such borrowing is neutral overall in terms of debt, because it replaces the funds that resolution authorities would otherwise have to borrow on the market. However, it does increase the debt level in federal securities.

 Source: Federal Ministry of Finance

Guarantees

 

Authorised amount

Amount allocated
as of
30 September 2020

Amount allocated
as of
30 September 2019

in €bn

Export credit guarantees

160.0

125.6

119.0

Loans to foreign debtors, foreign direct investment, EIB loans

80.0

40.6

43.0

Financial cooperation projects

35.0

28.6

24.9

Food stockpiling

0.7

0.0

0.0

Domestic guarantees

430.0

273.2

104.8

International financial institutions

100.0

68.6

60.1

Treuhandanstalt successor organisations

1.0

1.0

1.0

Interest compensation guarantees

15.0

15.0

15.0

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Calendar

Publication schedule1 of the monthly reports

November 2020 issue

October 2020

20 November 2020

December 2020 issue

November 2020

22 December 2020

January 2021 issue

December 2020

29 January 2021

February 2021 issue

January 2021

19 February 2021

March 2021 issue

February 2021

19 March 2021

April 2021 issue

March 2021

22 April 2021

May 2021 issue

April 2021

20 May 2021

June 2021 issue

May 2021

22 June 2021

July 2021 issue

June 2021

22 July 2021

August 2021 issue

July 2021

20 August 2021

September 2021 issue

August 2021

21 September 2021

October 2021 issue

September 2021

21 October 2021

November 2021 issue

October 2021

19 November 2021

December 2021 issue

November 2021

21 December 2021

1 In accordance with the IMF’s Special Data Dissemination Standard Plus (SDDS Plus); see http://dsbb.imf.org

Source: Federal Ministry of Finance

Monthly report

Reporting period

Publication date

Key dates on the fiscal and economic policy agenda

3–4 November 2020

Eurogroup and ECOFIN Council meetings

6 November 2020

Virtual meeting of ASEM finance ministers (Asia-Europe Meeting)

21–22 November 2020

G20 summit with meeting of finance ministers and central bank governors in Riyadh, Saudi Arabia

30 November–1 December 2020

Eurogroup and ECOFIN Council meetings

Due to the coronavirus pandemic, dates and the format of meetings will be specified at short notice prior to the respective meetings.