Trends in general government tax revenue

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

2018

April

Year‑on‑year
change

January to

April

Year‑on‑year
change

2018 estimates4

Year‑on‑year
change

in €m

in %

in €m

in %

in €m

in %

Joint taxes

           

Wages tax2

16,047

+8.5

81,242

+6.6

206,450

+5.6

Assessed income tax

198

 -32.2

19,386

+3.7

61,650

+3.7

Non-assessed taxes on earnings

2,994

+29.7

8,120

+12.3

21,900

+4.7

Final withholding tax on interest and capital gains

388

 -24.3

4,098

+10.8

7,895

+7.7

Corporation tax

853

+204.7

10,685

+14.4

32,330

+10.5

Value added taxes (VAT)

19,903

+4.4

96,149

+2.4

235,000

+3.8

Trade tax apportionment

294

+33.8

1,393

+0.6

4,758

+1.6

Increased trade tax apportionment

123

+66.8

1,110

 -0.8

3,899

+0.1

Total joint taxes

40,800

+8.7

222,183

+5.0

573,882

+4.8

Federal taxes

Energy duty

3,145

 -12.2

11,414

+0.2

41,300

+0.7

Tobacco duty

1,470

+28.3

4,855

 -2.9

14,160

 -1.7

Spirits duty incl. alcopops duty

191

+5.0

916

+1.8

2,100

+0.3

Insurance tax

980

+3.8

8,156

+3.6

13,670

+3.0

Electricity duty

540

+4.7

2,856

+0.5

6,930

 -0.2

Motor vehicle tax

799

+3.1

4,143

+1.9

9,010

+0.7

Aviation tax

92

 -3.9

382

+2.4

1,175

+4.9

Nuclear fuel duty

0

X

0

X

0

X

Solidarity surcharge

1,354

+10.4

7,139

+6.8

18,750

+4.4

Other federal taxes

111

 -1.6

607

+1.3

1,467

+1.5

Total federal taxes

8,680

+1.2

40,468

+1.9

108,562

+8.6

Länder taxes

Inheritance tax

522

+10.7

2,946

+12.6

6,020

 -1.5

Real property transfer tax

1,052

 -6.9

5,749

+6.2

13,900

+5.8

Betting and lottery tax

147

 -7.7

789

 -2.3

1,851

+0.8

Beer duty

57

+3.4

249

 -1.4

665

+0.1

Other Länder taxes

30

 -12.7

267

+1.7

465

+3.1

Total Länder taxes

1,808

 -2.3

9,999

+6.9

22,901

+3.1

EU own resources

Customs duty

332

 -13.7

2,007

 -2.5

5,200

+2.7

VAT-based own resources

141

 -28.5

1,045

+6.2

2,510

+6.3

GNI-based own resources

1,308

 -22.8

8,186

+117.3

22,610

+58.6

Total EU own resources

1,780

 -21.8

11,238

+65.0

30,320

+39.8

Federation3

24,153

+9.3

123,225

+0.9

321,336

+3.9

Länder 3

22,562

+6.7

121,506

+4.2

310,276

+4.0

EU

1,780

 -21.8

11,238

+65.0

30,320

+39.8

Local authorities’ share of income tax and value added tax

3,125

+10.2

18,688

+8.6

48,613

+7.7

Total tax revenue (excluding local authority taxes)

51,621

+6.8

274,658

+4.5

710,545

+5.3

Tax revenue in May 2018

Total tax revenue (excluding local authority taxes) was up by 6.8% in May 2018 over the same month last year. This was mainly due to the ongoing rise in receipts from joint taxes, which climbed by 8.7% on the year. Wages tax and non-assessed taxes on earnings recorded particularly strong increases. VAT receipts also rose in May 2018, having posted moderate results or even declines in previous months. In contrast, receipts from final withholding tax on interest and capital gains exhibited a downward trend. Revenue from taxes accruing solely to the Federation was up by 1.2% on the year in May, while the yield from taxes accruing solely to the Länder fell by 2.3%.

EU own resources

Transfers of own resources to the EU, including customs duties, fell by 21.8% on the year in May 2018, to roughly €1.8bn. Transfers to the EU are based on the planned financial framework for 2018, with fluctuations over the course of the year depending on the EU’s financing needs at any given time.

Cumulative overview of the January–May 2018 period

Total tax receipts increased by 4.5% on the year in the first five months of 2018. Broken down by category, revenue from joint taxes was up by 5.0%, receipts from federal taxes were up by 1.9%, and the yield from Länder taxes was up by 6.9%.

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 9.3% on the year in May 2018. Länder tax receipts also recorded a marked year-on-year gain (up by 6.7%), driven by strong yields from the share of joint taxes allocated to the Länder. The local authorities’ take from joint taxes was up by 10.2% on the year.

Joint taxes

Wages tax

Wages tax receipts again recorded strong growth in May 2018, with gross revenue from this tax increasing by 5.0% on the year. The figure reflects positive trends in both employment and wages. Child benefit payments – which are financed from wages tax receipts – declined on the year by 2.1%, but this figure was significantly distorted by a change in the underlying statistical data. However, this effect did not have an impact on cash receipts. Payments of old-age pension allowance, which is also financed from wages tax revenue, fell tangibly, by 5.1% on the year. On balance, cash receipts from wages tax increased by 8.5% in year-on-year terms in May 2018. In cumulative terms, cash receipts from wages tax were up by 6.6% on the year in the first five months of 2018.

Corporation tax

Gross receipts from corporation tax increased by €0.6bn in year-on-year terms to €0.9bn in May, traditionally a low-revenue month for this tax. After subtracting investment allowances, cash receipts from corporation tax increased to €0.9bn in May 2018. Taken cumulatively, cash receipts from corporation tax were up by 14.4% on the year in the January–May period.

Assessed income tax

Gross revenue from assessed income tax fell by 6.2% on the year in May, a month when revenue from this tax tends to be low. After subtracting employee refunds, which fell slightly by 1.8% on the year in May, and investment allowance payments and owner-occupied homes premiums, which are insignificant in volume terms, net cash receipts from income tax fell by €0.1bn to €0.2bn in May 2018. In cumulative terms, cash receipts from assessed income tax were up by 3.7% on the year in the first five months of 2018.

Non-assessed taxes on earnings

Gross receipts from non-assessed taxes on earnings were up sharply on the year in May, by 24.2%. Combined with the decline 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 29.7% in May 2018. Revenue from these taxes shows a high level of volatility over the course of the year, depending on how companies – major corporations in particular – schedule their dividend payments. Cumulative cash receipts from non-assessed taxes on earnings were up by 12.3% on the year in the January–May period.

Final withholding tax on interest and capital gains

Revenue from final withholding tax on interest and capital gains fell by 24.3% on the year in May 2018. This was probably due to a year-on-year decline in tax revenue from capital gains. Taken cumulatively, cash receipts from final withholding tax on interest and capital gains were up by 10.8% on the year in January–May 2018.

Value added taxes

The yield from value added taxes increased significantly in May 2018, by 4.4% on the year. Domestic VAT revenue was up by 3.2% on the year. Receipts from import VAT rose by 8.3% in year-on-year terms in May, following a 6.5% drop in April. Cumulative cash receipts from value added taxes were up by 2.4% on the year in the first five months of 2018.

Taxes accruing to the Federation

Receipts from taxes accruing solely to the Federation were up by 1.2% on the year in May 2018. Solidarity surcharge, insurance tax and electricity duty all posted year-on-year revenue gains in May 2018, increasing by 10.4%, 3.8% and 4.7% respectively. The 28.3% surge in receipts from tobacco duty was due to a temporal shift in revenue from April to May, which occurred for technical reasons. Energy duty revenue was down sharply on the year in May, falling by 12.2%. Here, too, the cause appears to be a technical revenue shift. 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 fell by 2.3% on the year in May 2018. A 10.7% increase in inheritance tax receipts failed to make up for a 6.9% drop in yields from real property transfer tax. The remaining Länder taxes exhibited disparate revenue trends. Beer duty was up by 3.4% on the year in May, while betting and lottery tax and fire protection tax both fell in year-on-year terms, by 7.7% and 12.9% respectively.