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21 December 2017

Tax rev­enue in Novem­ber 2017

Information on tax revenue from the Finance Ministry’s monthly report for November 2017.

Trends in general government tax revenue

Current-year trends in tax revenue (excluding local authority taxes)

2017

November

Year‑on‑year
change

January to

November

Year‑on‑year
change

2017 estimates4

Year‑on‑year
change

in €m

in %

in €m

in %

in €m

in %

Joint taxes

 

 

 

 

 

 

Wages tax2

15,083

+6.8

170,780

+6.1

195,800

+5.9

Assessed income tax

-391

X

43,973

+12.7

59,300

+10.2

Non-assessed taxes on earnings

869

+66.3

18,788

+10.0

20,850

+7.2

Final withholding tax on interest and capital gains

501

+47.0

6,420

+23.7

7,198

+21.2

Corporation tax

-376

X

20,636

+3.4

28,500

+3.9

Value added taxes (VAT)

20,491

+6.3

207,196

+4.3

226,600

+4.4

Trade tax apportionment

255

 -4.5

3,705

+11.6

4,651

+9.8

Increased trade tax apportionment

57

 -63.7

3,023

+9.4

3,875

+7.8

Total joint taxes

36,489

+7.5

474,520

+6.2

546,774

+5.9

Federal taxes

Energy duty

3,471

 -0.8

32,508

+2.5

41,050

+2.4

Tobacco duty

1,377

+19.2

12,525

+2.1

14,450

+1.9

Spirits duty incl. alcopops duty

169

+4.1

1,902

+1.6

2,090

+1.0

Insurance tax

817

 -4.0

12,611

+3.8

13,300

+4.2

Electricity duty

558

+5.0

6,289

+5.8

6,900

+5.0

Motor vehicle tax

695

+2.1

8,383

+0.4

8,980

+0.3

Aviation tax

115

+21.9

1,000

+6.7

1,135

+5.7

Nuclear fuel duty

0

X

-7,262

X

-7,261

X

Solidarity surcharge

908

+9.4

15,102

+7.0

17,900

+6.2

Other federal taxes

128

+2.8

1,307

+0.2

1,465

+0.4

Total federal taxes

8,239

+3.9

84,365

 -5.3

100,009

 -4.2

Länder taxes

Inheritance tax

526

+11.4

5,611

 -12.5

6,035

 -13.9

Real property transfer tax

1,120

+7.8

12,059

+7.3

13,270

+6.9

Betting and lottery tax

158

 -6.4

1,687

+1.8

1,855

+2.6

Beer duty

48

 -1.4

610

 -2.4

665

 -1.9

Other Länder taxes

17

 -17.0

412

+2.4

454

+2.8

Total Länder taxes

1,870

+6.8

20,380

+0.2

22,279

 -0.3

EU own resources

Customs duty

399

 -5.2

4,641

 -0.8

5,150

+0.7

VAT-based own resources

197

 -44.4

2,165

 -44.4

2,350

 -44.7

GNI-based own resources

1,579

 -13.4

12,641

 -30.0

14,870

 -25.3

Total EU own resources

2,175

 -16.3

19,447

 -27.0

22,370

 -23.6

Federation3

21,501

+9.2

264,490

+5.1

308,559

+6.8

Länder 3

20,506

+6.8

261,405

+5.5

298,131

+3.3

EU

2,175

 -16.3

19,447

 -27.0

22,370

 -23.6

Local authorities’ share of income tax and value added tax

2,816

+10.7

38,563

+10.0

45,152

+9.2

Total tax revenue (excluding local authority taxes)

46,997

+6.7

583,905

+4.1

674,212

+4.0

Tax revenue in November 2017

Total tax revenue (excluding local authority taxes) increased by 6.7% on the year in November 2017. Rising by 7.5% in November, joint taxes posted an increase which was appreciably higher than in September and October and which functioned as an important motor for the overall revenue trend. In particular, revenue from wages tax, from VAT, and from withholding tax on interest and capital gains posted considerable growth. Yields from taxes that accrue solely to the Federation and taxes that accrue solely to the Länder were both up on the year (by 3.9% and 6.8% respectively).

EU own resources

Transfers of own resources to the EU, including customs duties, fell by 16.3% in November 2017 compared with the same month last year. Taken cumulatively, own resources payments recorded a considerable decline of 27.0% on the year in the first eleven months of 2017. Transfers have declined sharply this year due to (a) balances resulting from EU adjustments and amending budgets and (b) the implementation of the EU’s new Own Resources Decision. Overall, it is anticipated that Germany’s transfers of own resources to the EU will be lower this year than in 2016. The amount of the monthly transfers is determined by the EU’s financing needs at any given time.

Cumulative overview of the January-November 2017 period

Total tax receipts were up by 4.1% on the year in the first eleven months of 2017. This is a result of an above-average rise in receipts from joint taxes (+6.2%). In contrast, yields from taxes accruing solely to the Federation posted a drop of 5.3%. Yields from taxes that accrue to the Länder have thus far remained roughly at last year’s level (+0.2%).

Distribution among the Federation, Länder and local authorities

Federal tax revenue in November (after accounting for federal supplementary grants) rose sharply on the year (+9.2%). There were three factors driving this development. Firstly, revenue from federal taxes rose by 3.9% on the year; secondly, there was also a 6.8% rise in the Federation’s share of revenue from joint taxes; thirdly, deductions were roughly €0.3bn lower than in November 2016. The main reason for this was a fall in transfers of own resources to the EU and lower federal supplementary grants. These factors combined to produce a positive outcome for the Federation in November. Länder tax receipts posted a year-on-year gain of 6.8%, after accounting for supplementary federal grants. The Länder saw an increase in their share of revenue from joint taxes (+7.8%), mainly as a result of the higher share of VAT revenue apportioned to them. In addition, Länder taxes increased by 6.8%. Local authority revenue from joint taxes was up by 10.7% on the year.

Joint taxes

Wages tax

The upward trend in wages tax revenue seen in recent months continued in November 2017, buoyed by sustained positive employment trends and rising wages. Gross revenue from wages tax increased by 5.6% on the year. Child benefit payments, which are financed from wages tax receipts, were up by 0.7% compared with the same month last year. Cash receipts from wages tax thus rose by 6.8% in November, and by 6.1% on the year in the period from January to November 2017.

Corporation tax

Trends in corporation tax revenue remained positive in November, traditionally a low-revenue month for this tax. In November 2017, net refunds were at approximately €0.4bn. The balance of back payments and refunds resulting from assessment activities decreased slightly in November 2017 compared with the same month last year. After subtracting investment allowance payments (which are financed from corporation tax revenue), disbursements of corporation tax were roughly €0.4bn. Cash receipts from corporation tax were up by 3.4% on the year in the January–November 2017 period.

Assessed income tax

The revenue trend for assessed income tax continued to be very positive as well. Refunds derived from assessment activities stood at €0.4bn in November 2017. In cumulative terms, revenue from assessed income tax was up by 12.7% on the year in the period from January to November 2017.

Non-assessed taxes on earnings

The taxation of dividend distributions by corporations are the main source of revenue in this category, although receipts from this type of tax are strongly influenced by fluctuations in dividend payments over the course of the year. Revenue from these taxes posted an increase of 44.6% in November 2017. Refunds paid out by the Federal Central Tax Office, which are subtracted from revenue totals, were down slightly. As a result, cash receipts from non-assessed taxes on earnings rose by 66.3% on the year. Overall, however, receipts from non-assessed taxes on earnings posted a year-on-year gain of 10.0% in the period from January to November 2017.

Final withholding tax on interest and capital gains

Revenue from final withholding tax on interest and capital gains increased by 47.0% in October, continuing the positive trend seen since February 2017. Given the ongoing low interest-rate environment, this result cannot be attributed to taxes on interest, but is more likely to be linked to trends in capital gains. However, no separate statistics are kept on the two revenue components, so it is not possible to provide reliable information on this question. In cumulative terms, revenue from withholding tax on interest and capital gains was up by 23.7% on the year in the period from January to November 2017.

Value added taxes

Receipts from value added taxes (a high-yielding category of tax) rose by 6.3% in November. Receipts from domestic VAT rose by 7.2%, while revenue from import VAT increased at a slower pace, up by 3.3%. Over the eleven months from January to November 2017, value added tax revenue was up by 4.3% on the year.

Taxes accruing to the Federation

Revenue from taxes that accrue solely to the Federation increased by 3.9% on the year in November. This is primarily because €0.2bn of tobacco duty revenue shifted from October to November, causing tobacco duty revenue to increase by 19.2% on the year in November, following a decrease of 18.4% in October 2017. The following major federal taxes posted revenue gains in November 2017: spirits duty (+4.1%), solidarity surcharge (+9.4%), motor vehicle tax (+2.1%) and electricity duty (+5.0%). Receipts from insurance tax and energy duty were down by 4.0% and 0.8%, respectively. Revenue trends from other taxes had only a minor impact on the results for taxes accruing solely to the Federation. On a cumulative basis, revenue from taxes accruing solely to the Federation fell by 5.3% in the period from January to November 2017. This can be attributed primarily to nuclear fuel duty refunds following the Federal Constitutional Court’s ruling of 13 April 2017.

Taxes accruing to the Länder

Receipts from taxes accruing solely to the Länder rose in November 2017, posting a gain of 6.8% on the year. This was primarily due to an increase in inheritance tax receipts (+11.4%) and in real property transfer tax (+7.8%). Revenue was down for fire protection tax (-16.4%), betting and lottery tax (-6.4%) and beer duty (-1.4%). Receipts from taxes accruing solely to the Länder were almost at the same level as in 2016, posting a gain of 0.2% in the period from January to November 2017.