Navigation and service

26 January 2018

Tax rev­enue in De­cem­ber 2017

Information on tax revenue from the Finance Ministry’s monthly report for January 2018.

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

24,744

+3.4

195,524

+5.8

195,800

+5.9

Assessed income tax

15,455

+4.3

59,428

+10.4

59,300

+10.2

Non-assessed taxes on earnings

2,131

 -10.3

20,918

+7.5

20,850

+7.2

Final withholding tax on interest and capital gains

913

+21.8

7,333

+23.5

7,198

+21.2

Corporation tax

8,623

+15.2

29,259

+6.6

28,500

+3.9

Value added taxes (VAT)

19,159

+3.7

226,355

+4.3

226,600

+4.4

Trade tax apportionment

980

+7.0

4,685

+10.6

4,651

+9.8

Increased trade tax apportionment

872

+5.1

3,895

+8.4

3,875

+7.8

Total joint taxes

72,877

+4.7

547,397

+6.0

546,774

+5.9

Federal taxes

Energy duty

8,514

+1.5

41,022

+2.3

41,050

+2.4

Tobacco duty

1,874

 -2.5

14,399

+1.5

14,450

+1.9

Spirits duty incl. alcopops duty

192

 -3.7

2,094

+1.1

2,090

+1.0

Insurance tax

659

+8.2

13,269

+4.0

13,300

+4.2

Electricity duty

655

+5.1

6,944

+5.7

6,900

+5.0

Motor vehicle tax

565

 -5.9

8,948

+0.0

8,980

+0.3

Aviation tax

121

 -11.7

1,121

+4.4

1,135

+5.7

Nuclear fuel duty

0

X

-7,262

X

-7,261

X

Solidarity surcharge

2,851

+4.2

17,953

+6.5

17,900

+6.2

Other federal taxes

139

 -10.1

1,446

 -0.9

1,465

+0.4

Total federal taxes

15,569

+1.3

99,934

 -4.3

100,009

 -4.2

Länder taxes

Inheritance tax

502

 -14.9

6,114

 -12.7

6,035

 -13.9

Real property transfer tax

1,080

 -7.8

13,139

+5.9

13,270

+6.9

Betting and lottery tax

149

 -1.1

1,837

+1.6

1,855

+2.6

Beer duty

55

+2.4

664

 -2.0

665

 -1.9

Other Länder taxes

39

+0.1

451

+2.2

454

+2.8

Total Länder taxes

1,825

 -8.9

22,205

 -0.6

22,279

 -0.3

EU own resources

Customs duty

422

 -2.6

5,063

 -1.0

5,150

+0.7

VAT-based own resources

197

 -44.4

2,362

 -44.4

2,350

 -44.7

GNI-based own resources

1,621

 -12.4

14,258

 -28.4

14,870

 -25.3

Total EU own resources

2,239

 -15.1

21,682

 -25.9

22,370

 -23.6

Federation3

44,846

+19.8

309,339

+7.0

308,559

+6.8

Länder 3

37,031

 -9.7

298,436

+3.4

298,131

+3.3

EU

2,239

 -15.1

21,682

 -25.9

22,370

 -23.6

Local authorities’ share of income tax and value added tax

6,577

+4.5

45,141

+9.2

45,152

+9.2

Total tax revenue (excluding local authority taxes)

90,693

+3.8

674,598

+4.1

674,212

+4.0

Tax revenue in December 2017

Total tax revenue (excluding local authority taxes) increased by 3.8% on the year in December 2017. Receipts from joint taxes remained strong, rising by 4.7% on the year in December and serving as an important driver of the overall upward trend. Revenue from wages tax, value added taxes and withholding tax on interest and capital gains all recorded substantial growth. Receipts from assessed income tax and especially from corporation tax also posted strong results in December, which is a key month for prepayments. Yields from taxes that accrue solely to the Federation were up by 1.3% on the year in December, while receipts from taxes that accrue solely to the Länder registered a year-on-year decline of 8.9%.

EU own resources

Transfers of own resources to the EU, including customs duties, were down by 15.1% in December 2017 compared with the same month last year. Taken cumulatively, own resources payments from January through December 2017 recorded a considerable year-on-year decline of 25.9%. Transfers were down sharply in fiscal year 2017 due to (a) balances resulting from EU adjustments and amending budgets and (b) the implementation of the EU’s new Own Resources Decision.

Cumulative overview of the January-November 2017 period

In fiscal year 2017, total tax revenue (excluding local authority taxes) posted a year-on-year gain of 4.1%. This outcome was driven by an above-average increase in receipts from joint taxes, which were up by 6.0% on the year. In contrast, the overall yield from taxes accruing solely to the Federation fell by 4.3% on the year, mainly due to refunds of nuclear fuel duty. Receipts from taxes accruing solely to the Länder were also down slightly on the year by 0.6%.

Distribution among the Federation, Länder and local authorities

The Federation’s tax receipts (after accounting for federal supplementary grants to the Länder) climbed sharply on the year by 19.8% in December 2017. This high rate of growth was caused by base effects from the previous year. Specifically, the vertical distribution of VAT revenue was modified in December 2016 by new legislation that increased federal support for the Länder to help them pay for refugee-related costs. This change meant that the Federation’s revenue in December 2016 was reduced by €4.6bn. In addition, based on another legislative amendment, public transport funding that the Federation allocates to the Länder was increased to €8.2bn in 2016. This annual total was likewise entered into the accounts in December 2016. Because of these two factors, it is difficult to make year-on-year comparisons of federal and Länder revenue totals for the months of December 2016 and December 2017. Furthermore, payments of own resources to the EU were down on the year in December 2017, and federal supplementary grants to the Länder declined as well. For fiscal year 2017 as a whole, federal revenue recorded a year-on-year gain of 7.0%.

Länder tax receipts were down by 9.7% on the year in December 2017 (after accounting for supplementary federal grants). The above-mentioned base effects that served to inflate growth rates for federal revenue had an inverse impact on growth rates for Länder revenue. For fiscal year 2017 as a whole, Länder revenue posted a year-on-year increase of 3.4%. Local authority revenue from joint taxes was up by 4.5% on the year in December and by 9.2% for fiscal year 2017.

Joint taxes

Wages tax

The upward trend in wages tax revenue seen in recent months continued in December 2017, buoyed by sustained positive employment trends and rising wages. Gross revenue from wages tax increased by 3.3% on the year in December. Child benefit payments, which are financed from wages tax receipts, were up by 2.3% compared with the same month last year. On balance, cash receipts from wages tax were up by 3.4% on the year. For fiscal year 2017 as a whole, cash receipts recorded a year-on-year gain of 5.8%.

Corporation tax

December is a month when corporation tax prepayments are due and revenue is traditionally high. Driven by a 16% year-on-year gain in prepayments, corporation tax receipts surged in December 2017. Gross receipts from corporation tax were up by 14.9% on the year. After subtraction of investment allowances (which are financed from corporation tax revenue), the year-on-year increase in cash receipts amounted to 15.2% in December. For fiscal year 2017 as a whole, revenue from corporation tax tallied a year-on-year gain of 6.6%.

Assessed income tax

The revenue trend for assessed income tax remained positive as well in December. Prepayments were up by nearly 6% over the same month last year, and gross receipts overall posted a gain of 3.2%. Investment grants and owner-occupied homes premiums are subtracted from the gross figure, but this generally has only a minimal effect on the final total. In contrast, refunds to employees assessed for income tax (which are also subtracted from the gross figure) have a larger impact on cash totals, and these were down by 16.3% on the year in December. As a result, cash receipts from assessed income tax were up by 4.3% on the year in December. In cumulative terms, revenue from assessed income tax was up by 10.4% on the year in fiscal year 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 major revenue source – posted a strong gain of 3.7% on the year in December. The yield from domestic VAT was up by 2.0%, while import VAT revenue rose by 8.7%. Taken cumulatively, revenue from value added taxes increased by 4.3% on the year in fiscal year 2017.

Taxes accruing to the Federation

Revenue from taxes that accrue solely to the Federation recorded a moderate increase of 1.3% on the year in December. Yields declined for some federal taxes, including tobacco duty (–2.5%), spirits duty (–3.7%), motor vehicle tax (–5.9%) and aviation tax (–11.7%). Other high-revenue federal taxes posted gains in December, including energy duty (+1.5%), insurance tax (+8.2%), solidarity surcharge (+4.2%) and electricity duty (+5.1%). Revenue trends for other federal taxes had only a minor impact on the results. On a cumulative basis, revenue from taxes accruing solely to the Federation fell by 4.3% on the year in fiscal year 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

Revenue from taxes that accrue solely to the Länder was down sharply by 8.9% on the year in December. This result was driven mainly by lower yields from inheritance tax (–14.9%) and real property transfer tax (–7.8%). Betting and lottery tax revenue also posted a drop of 1.1%, while beer duty revenue was up by 2.4% on the year. In cumulative terms, receipts from taxes accruing solely to the Länder recorded a slight year-on-year decline of 0.6% in fiscal year 2017.