Trends in general government tax revenue

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

2018

February

Year‑on‑year
change

January to

February

Year‑on‑year
change

2018 estimates4

Year‑on‑year
change

in €m

in %

in €m

in %

in €m

in %

Joint taxes

           

Wages tax2

15,732

+6.7

33,038

+5.9

205,200

+4.9

Assessed income tax

1,287

+23.7

2,271

+12.6

60,950

+2.6

Non-assessed taxes on earnings

626

+28.1

2,159

+9.7

19,880

 -5.0

Final withholding tax on interest and capital gains

1,390

+62.6

2,656

+32.7

7,500

+2.3

Corporation tax

486

+33.1

1,259

+84.2

30,650

+4.8

Value added taxes (VAT)

24,142

+5.9

43,215

+3.9

234,450

+3.6

Trade tax apportionment

147

 -21.8

165

 -34.0

4,718

+0.7

Increased trade tax apportionment

39

+20.6

105

 -40.3

3,868

 -0.7

Total joint taxes

43,848

+8.2

84,869

+6.3

567,216

+3.6

Federal taxes

Energy duty

1,436

 -1.8

1,715

 -1.4

41,000

 -0.1

Tobacco duty

991

+2.0

1,323

 -5.7

14,360

 -0.3

Spirits duty incl. alcopops duty

228

 -4.6

449

 -0.9

2,080

 -0.6

Insurance tax

4,820

+17.7

5,653

+3.6

13,520

+1.9

Electricity duty

546

+9.7

1,132

+10.5

6,930

 -0.2

Motor vehicle tax

739

+0.8

1,644

+1.7

9,010

+0.7

Aviation tax

74

+2.7

110

 -2.1

1,175

+4.9

Nuclear fuel duty

0

X

0

X

0

X

Solidarity surcharge

1,138

+10.2

2,360

+9.2

18,450

+2.8

Other federal taxes

137

 -2.5

276

+4.7

1,463

+1.2

Total federal taxes

10,109

+9.4

14,661

+3.0

107,988

+8.1

Länder taxes

Inheritance tax

453

 -4.3

939

 -5.5

5,767

 -5.7

Real property transfer tax

1,131

+3.5

2,353

+7.1

13,820

+5.2

Betting and lottery tax

150

+0.5

324

 -4.8

1,881

+2.4

Beer duty

44

+8.5

98

+3.1

659

 -0.8

Other Länder taxes

30

+4.3

52

+6.2

465

+3.1

Total Länder taxes

1,808

+1.3

3,767

+2.4

22,592

+1.7

EU own resources

Customs duty

476

+1.5

819

 -1.4

5,250

+3.7

VAT-based own resources

342

+44.7

522

+20.6

2,510

+6.3

GNI-based own resources

3,162

+56.9

3,329

X

24,440

+71.4

Total EU own resources

3,980

+46.3

4,671

+1.519.5

32,200

+48.5

Federation3

25,024

+4.8

46,176

 -3.4

315,797

+2.1

Länder 3

23,739

+6.3

46,260

+4.8

306,787

+2.8

EU

3,980

+46.3

4,671

+1.519.5

32,200

+48.5

Local authorities’ share of income tax and value added tax

3,499

+13.4

7,009

+10.6

48,262

+6.9

Total tax revenue (excluding local authority taxes)

56,241

+8.1

104,115

+5.6

703,046

+4.2

Tax revenue in February 2018

Total tax revenue (excluding local authority taxes) recorded a significant year-on-year gain of 8.1% in February 2018. This trend was underpinned by strong growth in receipts from joint taxes, which were up by 8.2%. Alongside value added taxes and wages tax (two major sources of revenue), final withholding tax on interest and capital gains also posted hefty growth. The sharp 9.4% rise in revenue from federal taxes was primarily due to a temporal shift in insurance tax revenue from January to February, which occurred for technical reasons. Revenue from taxes accruing solely to the Länder recorded moderate growth of 1.3%.

EU own resources

Transfers of own resources to the EU, including customs duties, were up by 46.3% on the year in February 2018 from a low 2017 baseline. Last year, Germany was granted a discount on its VAT-based own resources as a result of the implementation of the Own Resources Decision. This had the effect of reducing transfers in 2017. Moreover, Germany’s annual contribution of GNI-based own resources was also set significantly lower in the 2017 EU budget. Overall, this meant that Germany’s transfers of own resources to the EU were considerably lower in 2017. 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–February 2018 period

Tax receipts increased by 5.6% overall in the January-February 2018 period. This upward trend was apparent in receipts from joint taxes (6.3%), taxes accruing to the Federation (3.0%), and taxes accruing to the Länder (2.4%).

Distribution among the Federation, Länder and local authorities

The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) rose by 4.8% on the year in February 2018. At 6.3%, the increase in the Länder’s tax receipts was significantly higher than the growth in revenue from taxes accruing to the Länder. This is because the Länder received a higher share of joint taxes. The increase in transfers of EU own resources from the federal budget had a strong negative effect on the Federation’s tax revenue. The local authorities’ share of revenue from joint taxes was up by 13.4% on the year.

Joint taxes

Wages tax

Revenue from wages tax again recorded strong growth in February 2018, with gross revenue from this tax increasing by 5.2% on the year. The labour market situation remains favourable. Child benefit payments – which are financed from receipts from wages tax – saw a slight year-on-year rise of only 0.2% in February 2018. However, a change in the underlying statistics in one Land skewed the figures considerably. Without this, the increase in child benefit payments would have stood at approximately 3½%. This would have brought gross wages tax revenue growth up to 5.8%. Cash receipts from wages tax are not impacted by this effect. On balance, these were up by 6.7% on the year in February 2018 and by 5.9% on the year in cumulative terms over the first two months of 2018.

Corporation tax

Gross receipts from corporation tax saw a year-on-year surge of 31.7% in February 2018, although the volume of revenue was low. In February, yields from this tax tend to be determined by assessment activities. The balance between back-payments and refunds remained virtually unchanged compared with the same month of 2017. The revenue growth was a result of a rise in retroactive prepayments. Net investment grants had a slightly negative impact in February 2018. After subtracting them, the year-on-year increase in cash receipts from corporation tax totalled 33.1%. On a cumulative basis, cash receipts from corporation tax increased by 84.2% on the year in January–February 2018.

Assessed income tax

Gross revenue from assessed income tax was up by 12.1% over February 2017. Assessment activities resulted in a considerable rise of about 30% in retroactive prepayments. This compensated for a negative trend in the balance between back-payments and refunds, resulting in a markedly higher assessment result than in February 2017. After subtracting employee refunds, investment allowance payments and owner-occupied homes premiums, net cash receipts from income tax were up by 23.7% in February 2018. In cumulative terms, cash receipts from assessed income tax were up by 12.6% on the year in the January–February 2018 period.

Non-assessed taxes on earnings

February 2018 saw a 5.4% year-on-year rise in gross receipts from non-assessed taxes on earnings. After deducting refunds by the Federal Central Tax Office, which are financed from this revenue, and which were down by 39.9%, cash receipts from non-assessed taxes on earnings grew by 28.1% in February 2018. Cumulative cash receipts from non-assessed taxes on earnings in January and February 2018 were up by 9.7% on the year.

Final withholding tax on interest and capital gains

Revenue from final withholding tax on interest and capital gains rose by 62.6% on the year in January 2018. This substantial growth can probably be attributed to an increase in capital gains. However, it is not possible to state definitively what share of the revenue came from interest and what share from capital gains, as no separate statistics are kept on the two revenue components. In cumulative terms, cash receipts from withholding tax on interest and capital gains were up by 32.7% on the year in the January–February 2018 period.

Value added taxes

Revenue from value added taxes posted considerable year-on-year growth of 5.9% over a high February 2017 baseline. Receipts from domestic VAT grew by 4.3% on the year, while the yield from import VAT climbed by 11.9%. Cumulative cash receipts from value added taxes were up by 3.9% on the year in the January–February 2018 period.

Taxes accruing to the Federation

Receipts from taxes accruing solely to the Federation were 9.4% higher than in February last year. The considerable rise in revenue from federal taxes can mainly be attributed to a temporal shift in insurance tax revenue from January to February, which occurred for technical reasons. As a result, the yield from insurance tax grew by 17.7% on the year in February 2018 following a 38.8% decline in January. Solidarity surcharge, electricity tax and tobacco duty all posted revenue gains in February 2018 (up by 10.2%, 9.7% and 2.0%, respectively). In contrast, energy duty, alcohol duty (formerly known as spirits duty) and sparkling wine duty all recorded year-on-year declines (down by 1.8%, 4.6% and 8.3%, respectively). Trends in revenue from other taxes had only a minor impact on the overall results for federal taxes.

Taxes accruing to the Länder

Receipts from taxes accruing solely to the Länder were up by 1.3% on the year in February 2018. Gains were recorded for real property transfer tax (up 3.5%), betting and lottery tax (up 0.5%), beer duty (up 8.5%) and fire protection tax (up 4.9%), whereas inheritance tax posted a decline of 4.3%.