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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 January 2023 totalled approximately €24.3bn, up by 6.4% (about €1.5bn) on the year. Tax receipts increased by 6.4% (roughly €1.4bn) year-on-year. For further information about tax revenues, please refer to the article “Tax revenues in January 2023” [in German only] in the current issue of the monthly report.
The category of “other income” recorded a year-on-year gain of 6.1% (about €0.1bn) in January 2023.
Federal expenditure in January 2023 totalled approximately €52.5bn, up by 15.6% (about €7.1bn) on the year. A breakdown by economic category shows that the rise in expenditure was driven mainly by investment spending, which was 198.2% (about €6.6bn) higher than in January 2022. This enormous increase is mainly due to a special factor: a €6.3bn loan that was granted to the IMF’s Resilience and Sustainability Trust in January 2023 was recorded as an investment item, as required under budget law. After adjusting for this effect, investment spending was up by €0.3bn, or 7.8%. Fixed asset investment was about 7.3% higher than in the same month last year.
Consumption spending remained roughly at the same level as last year, increasingly by only 1.3% (€0.5bn). There were several contrasting trends overall. Operating expenditure rose significantly (by 37.9% or about €0.7bn). As a result of the general increase in interest rates, interest expenditure also saw a substantial increase (of 47.8% or about €1.6bn). By contrast, ongoing grants and subsidies declined by 6.3%, or about €2bn, mainly due to the fact that fewer financial resources had to be made available for combating and mitigating the negative impact of the COVID-19 pandemic. For example, federal payments to the health fund to cover pandemic-related costs declined by about €2.6bn, to €0.3bn. In January 2023, there were no pandemic-related compensation payments under section 21 of the Hospital Financing Act (Krankenhausfinanzierungsgesetz), which totalled €1.4bn in January 2022. Pandemic-related assistance for businesses stood at approximately €60m, down by about €0.4bn.
The federal budget recorded a deficit of about €28.2bn in January 2023.
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.
Trends in federal expenditure by function
Trends in federal expenditure by function
General public services
108,785
22.6
108,723
22.8
8,215
9,226
+12.3
Economic cooperation and development
13,615
2.8
12,005
2.5
1,181
1,361
+15.3
Defence
51,608
10.7
52,027
10.9
3,827
4,586
+19.8
Government, central administration
22,069
4.6
22,471
4.7
1,896
2,001
+5.5
Revenue administration
6,150
1.3
6,766
1.4
467
471
+0.8
Education, science, research, cultural affairs
28,009
5.8
33,483
7.0
942
1,593
+69.1
Support for school and university students and training programme participants
4,127
0.9
5,646
1.2
406
527
+29.9
Science, research and development outside of higher education institutions
16,638
3.5
20,273
4.3
271
680
+150.9
Social security, family affairs and youth, labour market policy
253,717
52.8
214,183
45.0
28,182
27,607
-2.0
Social security funds including unemployment insurance
136,757
28.5
136,461
28.7
19,368
20,041
+3.5
of which:
General pension insurance
99,373
20.7
103,082
21.6
15,027
15,706
+4.5
Health insurance
15,867
3.3
18,975
4.0
1,225
1,452
+18.5
Labour market policy
42,625
8.9
44,351
9.3
3,077
3,682
+19.7
of which:
Citizens’ minimum income under Book II of the Social Code
22,276
4.6
23,760
5.0
1,884
2,384
+26.6
Government housing and heating allowances under Book II of the Social Code
9,729
2.0
10,400
2.2
559
662
+18.5
Family assistance, welfare services, etc.
11,711
2.4
14,984
3.1
962
1,027
+6.8
Social benefits under Book XII of the Social Code and the Asylum Seekers Benefits Act (Asylbewerberleistungsgesetz)
8,690
1.8
9,075
1.9
907
986
+8.7
Other social affairs
48,857
10.2
4,116
0.9
3,372
1,202
-64.4
Health, environment, sport, recreation
18,489
3.8
9,437
2.0
2,105
448
-78.7
Housing, urban development, regional planning and local community services
2,664
0.6
3,909
0.8
90
139
+55.3
Housing, home ownership savings premium
1,589
0.3
2,540
0.5
88
131
+49.1
Food, agriculture and forestry
1,701
0.4
2,134
0.4
76
46
-39.6
Energy and water management, trade and services
8,795
1.8
20,979
4.4
780
6,741
+763.9
Regional support measures
1,970
0.4
3,364
0.7
26
7
-72.3
Monetary and insurance system
2,227
0.5
6,899
1.4
400
6,500
X
Other trade and services
514
0.1
5,954
1.3
14
38
+178.6
Transport and communication
28,125
5.9
28,008
5.9
1,428
1,500
+5.0
Roads
9,243
1.9
9,459
2.0
386
410
+6.3
Railways and public transport
11,852
2.5
10,875
2.3
606
519
-14.4
Financial management
30,403
6.3
55,435
11.6
3,585
5,201
+45.1
Real property and capital assets, special funds and financial grants
13,948
2.9
16,925
3.6
214
225
+5.1
Interest expenditure and borrowing-related expenditure
15,293
3.2
39,864
8.4
3,295
4,871
+47.9
Total expenditure¹
480,688
100.0
476,291
100.0
45,403
52,501
+15.6
¹ 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
Consumption expenditure
434,477
90.4
411,688
86.4
42,093
42,632
+1.3
Human resources expenditure
37,843
7.9
41,669
8.7
4,031
4,162
+3.2
Salary payments
28,193
5.9
31,775
6.7
2,912
2,983
+2.4
Pensions
9,650
2.0
9,894
2.1
1,119
1,179
+5.4
Operating expenditure
45,075
9.4
49,147
10.3
1,877
2,588
+37.9
Maintenance of immovable property
1,154
0.2
1,082
0.2
54
57
+5.6
Military procurement
18,981
3.9
18,477
3.9
616
1,072
+74.0
Other
24,939
5.2
29,588
6.2
1,207
1,459
+20.9
Interest expenditure
15,264
3.2
39,841
8.4
3,294
4,870
+47.8
Ongoing grants and subsidies
335,039
69.7
279,324
58.6
32,595
30,551
-6.3
to public administrations
47,360
9.9
36,875
7.7
3,392
2,256
-33.5
to other areas
287,679
59.8
242,448
50.9
29,204
28,295
-3.1
of which:
Companies
48,308
10.0
37,812
7.9
2,935
2,351
-19.9
Pensions, benefits, etc.
34,538
7.2
38,950
8.2
2,962
3,509
+18.5
Social security funds
176,328
36.7
143,728
30.2
21,483
20,694
-3.7
Other asset transfers
1,256
0.3
1,707
0.4
295
461
+56.3
Investment expenditure
46,211
9.6
71,475
15.0
3,310
9,869
+198.2
Financial assistance
39,664
8.3
63,378
13.3
3,131
9,677
+209.1
Grants and subsidies
34,001
7.1
41,360
8.7
1,539
2,220
+44.2
Loans, guarantees
3,560
0.7
20,641
4.3
1,592
7,457
+368.4
Acquisition of holdings; capital contributions
2,103
0.4
1,377
0.3
0
0
X
Fixed asset investment
6,546
1.4
8,097
1.7
179
192
+7.3
Construction projects
4,053
0.8
5,311
1.1
78
62
-20.5
Acquisition of movable assets
2,303
0.5
2,631
0.6
103
122
+18.4
Acquisition of real property
190
0.0
154
0.0
-2
8
-500.0
General reduction/increase in expenditure
0
0.0
-6,872
-1.4
0
0
X
Total expenditure¹
480,688
100.0
476,291
100.0
45,403
52,501
+15.6
¹ 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
Income tax and corporation tax
(incl. final withholding tax on interest and capital gains)
171,830
47.1
175,337
45.0
9,168
8,586
-6.3
of which:
Wages tax
96,564
26.5
109,799
28.2
6,280
6,252
-0.4
Assessed income tax
32,900
9.0
24,170
6.2
856
846
-1.2
Non-assessed tax on earnings
16,313
4.5
16,175
4.1
873
704
-19.4
Final withholding tax on interest and capital gains
2,886
0.8
3,168
0.8
408
354
-13.2
Corporation tax
23,167
6.4
22,025
5.6
751
430
-42.7
Value added taxes
132,813
36.4
141,668
36.3
11,363
12,273
+8.0
Trade tax apportionment paid to Federation and Länder
2,573
0.7
2,503
0.6
81
155
+91.4
Energy duty
33,667
9.2
36,965
9.5
391
283
-27.6
Tobacco duty
14,229
3.9
15,630
4.0
538
461
-14.3
Solidarity surcharge
11,978
3.3
12,500
3.2
666
678
+1.8
Insurance tax
15,672
4.3
16,270
4.2
818
829
+1.3
Electricity duty
6,830
1.9
6,800
1.7
629
611
-2.9
Motor vehicle tax
9,499
2.6
9,470
2.4
883
872
-1.2
Alcohol duty including alcopops duty
2,194
0.6
2,172
0.6
178
165
-7.3
Coffee duty
1,063
0.3
1,060
0.3
102
97
-4.9
Aviation tax
1,140
0.3
1,535
0.4
62
94
+51.6
Sparkling wine duty and intermediate products duty
379
0.1
390
0.1
26
38
+46.2
Other taxes accruing to the Federation
2
0.0
2
0.0
0
0
X
Deductions
Consolidation assistance for the Länder
800
X
800
X
0
0
X
Supplementary grants to Länder
10,675
X
11,080
X
0
0
X
EU own resources (GNI-based)
25,574
X
27,070
X
2,388
1,160
-51.4
EU own resources (VAT-based)
4,838
X
5,100
X
395
425
+7.6
EU own resources (plastics)
1,377
X
1,380
X
0
115
X
Grants to Länder for public transport
14,444
X
9,754
X
944
908
-3.8
Grants to Länder for motor vehicle tax and HGV toll
8,992
X
8,992
X
0
0
X
Other revenue
27,485
7.5
31,795
8.2
1,663
1,764
+6.1
Revenue from economic activity
5,562
1.5
4,453
1.1
34
27
-20.6
Interest revenue
578
0.2
1,258
0.3
66
117
+77.3
Loan repayments, holdings, privatisation proceeds
1,413
0.4
2,135
0.5
64
56
-12.5
Total revenue²
364,653
100.0
389,921
100.0
22,840
24,299
+6.4
¹ Any discrepancies in relation to the table “2023 trends in tax revenue (excluding local authority taxes)” are due to the methodology used.
² 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.
Source: Federal Ministry of Finance
2023 trends in tax revenue (excluding local authority taxes)
2023 trends in tax revenue (excluding local authority taxes)¹
Joint taxes
Wages tax²
20,778
+4.2
258,350
+13.7
Assessed income tax
1,996
-1.1
79,350
+2.5
Non-assessed taxes on earnings
1,550
-15.6
32,350
-0.8
Final withholding tax on interest and capital gains (including the former withholding tax on interest income)
804
-13.2
7,200
+9.8
Corporation tax
860
-42.8
44,050
-4.9
Value added taxes
24,808
+5.5
289,950
+1.8
Total joint taxes
50,796
+2.1
711,250
+5.4
Trade tax apportionments paid to Federation and Länder
Trade tax apportionments
348
+28.8
6,041
-4.8
Increased trade tax apportionments
0
-94.6
0
Total trade tax apportionments
348
+28.7
6,041
-4.8
Taxes accruing to the Federation
Energy duty
283
-27.5
36,965
+9.8
Tobacco duty
461
-14.4
15,630
+9.8
Alcohol duty
165
-7.2
2,170
-1.0
Insurance tax
829
+1.4
16,270
+3.8
Electricity duty
611
-2.7
6,800
-0.4
Motor vehicle tax
872
-1.2
9,470
-0.3
Aviation tax
94
+51.2
1,570
+37.7
Solidarity surcharge
678
+1.8
12,500
+4.4
Other taxes accruing to the Federation
135
+5.2
1,454
+0.6
Total taxes accruing to the Federation
4,129
-3.8
102,829
+6.4
Taxes accruing to the Länder
Inheritance tax
764
-15.2
9,500
+3.0
Real property transfer tax
1,205
-24.1
16,900
-1.3
Betting and lottery tax
238
-8.1
2,623
+2.1
Beer duty
45
-4.7
591
-1.5
Other taxes accruing to the Länder
28
+2.4
600
+3.5
Total taxes accruing to the Länder
2,280
-19.2
30,214
+0.4
EU own resources
Customs duties
481
+13.9
6,850
+0.3
VAT-based own resources
425
+7.6
5,100
+5.4
GNI-based own resources
1,160
-48.9
27,070
+5.9
Plastics own resources
115
-0.8
1,380
+0.2
Total EU own resources
2,181
-31.9
40,400
+4.6
Federation³
23,527
+7.3
369,707
+9.6
Länder³
28,118
-0.8
387,370
+0.7
EU
2,181
-31.9
40,400
+4.6
Local authorities’ share of income tax and value added tax
4,208
+3.3
59,706
+9.4
Total tax revenue (excluding local authority taxes)
58,034
+0.8
857,184
+5.2
¹ Methodology: 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. ² After deduction of child benefit refunds by the Federal Central Tax Office. ³ After supplementary grants; any discrepancies with the table on trends in federal revenue are due to the methodology used (see footnote 1). ⁴ Results of the Working Party on Tax Revenue Estimates of November 2022. Source: Federal Ministry of Finance
Total tax revenue (excluding local authority taxes) was up by 0.8% on the year in January 2023, thanks to a 2.1% increase in revenue from joint taxes. Receipts from the two taxes that generate the most revenue – wages tax and value added taxes – recorded substantial gains. However, there were declines in revenue from the remaining joint taxes, most significantly corporation tax, non-assessed taxes on earnings and final withholding tax on interest and capital gains. Revenue from taxes accruing solely to the Federation fell by 3.8%, with energy duty, tobacco duty and electricity duty all recording appreciable declines. Revenue from taxes accruing to the Länder was down by 19.2% on the year, primarily due to downwards trends in receipts from real property transfer tax and inheritance tax, the two highest-yielding Länder taxes.
Transfers of own resources to the EU, including customs duties, were 31.9% lower in January 2023 than in the same month of 2022. In general, monthly requisitions are based on the annual EU budget that is in force for the respective year and are distributed relatively evenly across individual months. However, there can sometimes be substantial year-on-year fluctuations in individual months.
Distribution among the Federation, Länder and local authorities
The Federation’s tax receipts (after accounting for supplementary federal grants that, under the fiscal equalisation system, are paid from the Federation’s revenues to Länder with below-average capacity) recorded a year-on-year rise of 7.3% in January 2023. The Federation’s take from joint taxes grew by 3.2%. This was higher than the increase in overall revenue from joint taxes, which amounted to 2.1%. The discrepancy is due to the fact that the Federation’s receipts from its share of VAT revenue increased by 7.9%, even though overall VAT revenue posted a smaller increase of 5.5%.
Under section 1 (1) of the Fiscal Equalisation Act (Finanzausgleichsgesetz), the Federation receives 52.81% of overall VAT revenue. This share is subsequently reduced by annual fixed amounts that the Federation allocates to the Länder and local authorities under vertical financial equalisation arrangements. The disproportionate increase in the Federation’s take from its share of VAT revenue in January 2023 can be attributed to the effects of these fixed amounts:
Because the fixed amounts were approximately €0.2bn lower than in January 2022, the Federation’s overall receipts from VAT increased substantially. In 2022, the Länder received additional funds under the Act to Improve Quality and Participation in Child Daycare (KiTa-Qualitäts- und -Teilhabeverbesserungsgesetz) as well as a post-pandemic catch-up programme for children and young people for 2021 and 2022.
It should be noted that even when the fixed amounts remain unchanged, the Federation’s VAT receipts rise when VAT revenue increases, since the volumes of the fixed amounts are not linked to revenue trends.
Other trends in January 2023: Revenue from taxes accruing solely to the Federation was down by 3.8% on the year. Supplementary federal grants to the Länder increased by 11.5%. Federal subsidies to the Länder for public transport were slightly down on the year. Federal transfers of own resources to the EU were lower than in 2022 (see above).
Länder tax receipts posted a small year-on-year decline of 0.8% in January 2023. Due to the mechanism for distributing VAT revenue described above, the Länder posted lower rates of growth for VAT revenue (up by 3.1%) and revenue from joint taxes (up by 0.8%) than the Federation. In addition, the yield from taxes that accrue exclusively to the Länder posted a significant decline of 19.2%. Länder receipts from federal subsidies for public transport were down by 3.8% on the year. However, the Länder saw an increase in receipts from supplementary federal grants (up by 11.5%).
Local authorities’ take from their share of joint taxes was 3.3% higher than in the same period last year, while their receipts from value added taxes were up by 3.8% on the year.
Gross revenue from wages tax was up by 6.0% on the year in January 2023. Among other things, this reflects the labour market’s continued robust performance in December 2022, despite the overall economic burdens (see the article on economic trends [in German only] in the current issue of the monthly report). Child benefit payments – which are financed from wages tax receipts – rose by 15.3% on the year in January, primarily due to the increase in child benefit that came into effect on 1 January 2023. On balance, cash receipts from wages tax were up by 4.2% on the year.
Gross corporation tax receipts in January are strongly influenced by the revenue administration’s assessment activities and were down sharply on the year by 41.2%. Research and investment allowance payments, which are financed from corporation tax receipts, totalled about €24.4m and thus had only a marginal impact on the yield from corporation tax. Cash receipts from corporation tax were down by 42.8% on the year in January 2023.
Gross revenue from assessed income tax recorded a year-on-year increase of 7.7% in January 2023. Employee refunds (which are subtracted from the gross figure) were up by 43.9% on the year. As with corporation tax, trends in gross tax revenue from assessed income tax and employee refunds are driven by assessment activities. Investment allowance payments, research allowance payments and owner-occupied homes premiums, which are insignificant in terms of amount, are also subtracted from the gross figure. On balance, cash receipts from assessed income tax were down by 1.1% on the year in January 2023.
Gross receipts from non-assessed taxes on earnings were 15.8% lower than in January last year. Refunds by the Federal Central Tax Office, which are financed from gross revenue, totalled about €7m (down by 47.2% on the year). Overall, cash receipts from non-assessed taxes on earnings fell by 15.6% on the year in January.
Revenue from value added taxes was up by 5.5% on the year in January 2023. Receipts from (domestic) VAT recorded a slight increase of 0.3%, while receipts from import VAT rose by 19.5% in year-on-year terms. Revenue from import VAT saw a marked increase, in line with the considerable year-on-year rise in the value of imported goods. Because import VAT can be deducted as input tax from (domestic) VAT, rising import VAT receipts tend to result in weaker revenue trends for (domestic) VAT. In addition, the reduction in the VAT rate on gas and district heating (from 1 October 2022 until 31 March 2024) is likely to have had a noticeable dampening effect on receipts from (domestic) VAT.
In January 2023, revenue from taxes accruing solely to the Federation was down by 3.8% compared with the same month last year. Energy duty receipts recorded a sharp year-on-year decline of 27.5%, while revenue from tobacco duty fell by 14.4% on the year. Receipts from the solidarity surcharge rose by 1.8% on the year, thanks to growth in revenue from the taxes that make up its tax base. Revenue gains were also posted for insurance tax (up by 1.4%) and aviation tax (up by 51.2% – this surge can be attributed to the low 2021 baseline, which was still affected by the pandemic). Year-on-year revenue declines were recorded for motor vehicle tax (down by 1.2%), electricity duty (down by 2.7%), alcohol duty (down by 7.2%) and coffee duty (down by 5.1%). Trends in revenue from other taxes had only a minor impact on overall receipts from federal taxes.
Receipts from taxes accruing solely to the Länder were down by 19.2% on the year in January 2023, mainly as a result of declines in revenues from real property transfer tax (down by 24.1%) and inheritance tax (down by 15.2%). In the case of real property transfer tax, the negative revenue trend probably reflects the weakening of the real estate market as a result of the sharp rise in construction prices and less favourable financing conditions. Year-on-year revenue declines were recorded for betting and lottery tax (down by 8.1%) and beer duty (down by 4.7%), while receipts from fire protection tax were 2.7% higher than in the same month of 2022.
Borrowing trends for the Federation (budget and special funds, excluding loan financing) in January 2023
Borrowing trends for the Federation (budget and special funds, excluding loan financing) in January 2023
in €m
Total
1,441,993
36,719
-59,032
1,419,680
-22,313
-5,108
broken down by purpose
Federal budget
1,370,503
22,731
-59,032
1,334,202
-36,301
-5,108
Financial Market Stabilisation Fund (loans for expenses pursuant to section 9 (1) of the Stabilisation Fund Act (Stabilisierungsfondsgesetz))
22,927
-3
-
22,924
-3
-
Investment and Redemption Fund
16,279
-
-
16,279
-
-
Economic Stabilisation Fund (loans for recapitalisation measures pursuant to section 22 of the Stabilisation Fund Act)
2,060
-1
-
2,059
-1
-
Economic Stabilisation Fund (loans to mitigate the impact of the energy crisis
pursuant to section 26a of the Stabilisation Fund Act, excluding the granting of loans)
30,225
13,500
-
43,725
13,500
-
broken down by debt type
Conventional federal securities
1,286,836
34,671
-23,150
1,298,357
11,521
-4,973
30-year federal bonds
308,993
3,035
-
312,027
3,035
-4,548
10-year federal bonds
608,356
9,551
-
617,907
9,551
-466
Federal notes
159,784
5,110
-
164,894
5,110
-41
Federal Treasury notes
90,141
5,490
-
95,630
5,490
-26
Treasury discount papers issued by the Federation
119,562
11,487
-23,150
107,899
-11,664
109
Inflation-linked federal securities
72,357
468
-
72,825
468
-12
Green federal securities
36,411
1,580
-
37,991
1,580
-110
Securitised loans
-
-
-
-
-
-
Other loans and ordinary debts
5,360
-
-
5,360
-
-3
Additional information
Liabilities from the indexing of inflation-linked federal securities
15,844
X
X
15,899
55
X
Reserves in accordance with the Final Payment Financing Act (Schlusszahlungsfinanzierungsgesetz)
9,124
X
X
9,215
92
X
Liabilities 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.
In contrast, the total given for reserves to make provision for final payments on inflation-linked federal securities pursuant to the Finance Payment Financing Act includes 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).
