Double burden
A double burden arises when the same income is taxed more than once. A distinction is made between a legal and a factual double burden. Double tax charges are only possible for issues on a purely national level. In contrast, multiple taxation resulting from cross-border situations is referred to as double taxation .
Legal double burden
Legal double taxation refers to the double taxation of the same income for the same taxpayer, for example charging the business income of corporations with trade tax and corporation tax .
Actual double burden
Actual double taxation refers to the taxation of the same income for different taxpayers.
Corporate tax
One example is the classic system in corporation tax. Here, the income of the corporation (e.g. a stock corporation ) is taxed both at the corporation level and at the shareholder level , but legally these are two different tax subjects .
Until its abolition under Finance Minister Hans Eichel in 2000, this double burden was prevented by the crediting procedure . Since 2000, with the half-income procedure introduced at the time, this double burden in Germany has at least been alleviated. As part of the 2008 corporate tax reform, the half-income method for private investment income was replaced by a withholding tax or the partial income method from 2009 , which means that distributions by corporations to natural persons have since been subject to a double burden (albeit with reduced tax rates).
Business tax
In the area of trade tax, the box privilege prevents multiple charges for investments.
Inheritance tax
In the area of inheritance tax, there is a double burden from not taking deferred tax into account . If there are still tax issues with the testator that lead to (income) tax liability without a valid tax assessment at the time of death , the heir must pay these deferred taxes (after the assessment has been issued), but they cannot be used as an estate liability from the inherited Deduct assets. So he has to pay tax on the part of the inheritance that he has to use to pay the tax in inheritance tax.
This was a rare case before the withholding tax was introduced as part of the 2008 corporate tax reform . For example, this was the case with the self-employed who died before filing their income tax return. The number of those affected has been significantly higher since 2009, as the taxation of the increases in value means that many investments are burdened with deferred taxes. An example: The testator purchases a share for € 100. At the time of death, the value is 200 €. When selling, he now has to pay € 28 withholding tax. In fact, the heir has only inherited € 172, but has to subject € 200 to inheritance tax.
value added tax
Until the introduction of VAT in 1967, the entire purchase price was subject to VAT in Germany . The tax burden therefore increased with every step between production and customer. For this reason, value added tax regulates that only the value added generated in the respective stage is subject to tax. This is achieved through the possibility of input tax deduction for preliminary products. So today there is no longer a double burden.
