Basic tax allowance (Germany)

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development
Years Basic tax allowance
per year
01.01-20.06.1948 300 RM
1949–05 / 1953 750 DM
06 / 1953-1954 800 DM
1955-1957 900 DM
1958-1974 1,680 DM
1975-1977 3,029 DM
1978 3,329 DM (3,839 DM)
1979-1980 3,690 DM (4,200 DM)
1981-1985 4,212 DM
1986-1987 4,536 DM
1988-1989 4,752 DM
1990-1995 5,616 DM
1996-1997 12,095 DM
1998 12,365 DM
1999 13,067 DM
2000 13,499 DM
2001 14,039 DM
2002-2003 € 7,235
2004-2008 € 7,664
2009 € 7,834
2010–2012 € 8,004
2013 € 8,130
2014 € 8,354
2015 € 8,472
2016 € 8,652
2017 € 8,820
2018 € 9,000
2019 € 9,168
2020 € 9,408
2021 € 9,696
2022 € 9,984

The basic allowance is since 1996 in Germany sure that to cover the subsistence minimum necessary income is not reduced by taxes. Every person liable to income tax is entitled to an annual tax-free basic allowance ( Section 32a (1) No. 1 Income Tax Act (EStG)). This amount is calculated in the income tax rate when taxable income taken into account automatically.

Basics until 1995

The amount of the basic allowances up to 1995 does not follow a uniform system and justification.

Constitutional foundations since 1996

In a series of decisions, the Federal Constitutional Court made it clear that due to the constitutional requirements in the Basic Law - especially with regard to the meaning and legal scope of the welfare state principle - tax law and social assistance law are closely linked. The significant increase in the basic tax allowance in 1996 is due to this case law (see table).

After the income tax liability has been met, the income tax payer must have as much left of his acquired income as he needs to earn his living and that of his family (“ subsistence level ”). The measure for the assessment of the tax-exempt material subsistence level is the subsistence level defined under social assistance law, which may be exceeded but not fallen below. The living expenses must be measured realistically according to the actual need; what is needed to create the minimum requirements for a decent existence must remain tax-free.

The burden of indirect taxes included in consumer prices must also be taken into account and compensated for in income taxation. In the opinion of the Federal Ministry of Finance, however, higher indirect taxes affecting the standard rate-relevant consumption would first have to lead to an increase in the standard benefit before any effects on the tax exemptions could arise.

In the case of families, it is constitutionally necessary to exempt income from tax insofar as it is required for childcare costs and to cover the educational needs of a child. (see main article child allowance )

Social assistance as the basis for calculating the basic allowance

The determination of the tax-exempt subsistence level is based on the applicable social welfare law ( Twelfth Book of the Social Code , Standard Requirements Investigation Act ). The following components of need under social assistance law are taken into account:

  1. Standard requirement
  2. Needs for education and participation of children
  3. Accommodation costs (gross rent or comparable expenses for home or apartment ownership in an appropriate amount)
  4. Heating costs including costs for water heating

The determination (or restriction) to the aforementioned components of needs results from the criterion of the necessary minimum social assistance requirement. Special needs (e.g. for single parents) are not taken into account when determining the basic tax-free amount due to their individual or group-related nature. The additional requirement resulting from the performance of a job is also not taken into account. The employment with the associated expenses ( advertising cost ) can be released for by the workers standard amount and the commuting allowance taken into account.

Contributions to health , long-term care and pension insurance are not used to determine the basic allowance. In terms of tax law, these pension expenses are deductible as special expenses in accordance with Section 10 of the Income Tax Act .

Subsistence level reports from the federal government

The report on the subsistence level of adults and children (abbreviated as subsistence level report ) is submitted by the German government every two years in accordance with the resolution of the German Bundestag on June 2, 1995.

The subsistence level report, which is prognostic ( ex-ante calculation), shows the level of the subsistence level for adults and children to be exempt from income tax. Child benefit is also based on this .

Negative subsistence level

From 1996 to 2016, the basic tax-free allowance was increased from € 6,184 to € 8,652. The comparability with the tax exemptions applicable in the respective tax year is limited.

Tax-exempt minimum subsistence levels in the previous subsistence level reports
source Reporting year neuter subsistence level for information:
single Married couples children Basic allowance,
for spouses × 2		 Child allowance, without an allowance for
care, education or training needs
1996 € 6,071 € 10,286 € 3,215 € 6,184 € 3,203
1999 € 6,455 € 10,976 € 3,424 € 6,681 € 3,534
2001 € 6,547 € 11,136 € 3,460 € 7,206 € 3,534
2003 € 6,948 € 11,640 € 3,636 € 7,235 € 3,648
2005 € 7,356 € 12,240 € 3,648 € 7,664 € 3,648
2008 € 7,140 € 12,276 € 3,648 € 7,664 € 3,648
2010 € 7,656 € 12,996 € 3,864 € 7,664 € 3,648
2012 € 7,896 € 13,272 € 4,272 € 8,004 € 4,368
2014 (for 2015) € 8,472 € 14,472 € 4,512 € 8,472 € 4,368
2014 (for 2016) € 8,652 € 4,608 € 8,652 € 4,608
2016 (for 2017) € 8,820 € 14,856 € 4,716 € 8,820 € 4,716
2016 (for 2018) € 9,000 € 4,788 € 9,000 € 4,788
: 2018 (for 2019) € 9,168 € 15,540 € 4,896 € 9,168 € 4,980
2018 (for 2020) € 9,408 € 5,004 € 9,408 € 5,172

Basic allowances from 2005

year Rule set
Accommodation costs 		heating costs Negative
subsistence level 		Tax
exemption 		source
single
2005 4.164 2,592 600 7,356 7,664
2008 4.140 2,364 636 7.140 7,664
2010 4,368 2,520 768 7,656 8.004
2012 4,488 2,724 684 7,896 8.004
2015 4,788 2,988 696 8,472 8,472
2016 4,872 3,060 720 8,652 8,652
2017 4,908 3,312 600 8,820 8,820
2018 4,968 3,396 636 9,000 9,000
2019 5,088 3,468 612 9,168 9,168
2020 5,196 3,552 660 9,408 9,408
Married couples
2005 7,488 3,984 768 12,240 15,328
2008 7,464 4,020 792 12,276 15,328
2010 7,860 4.164 972 12,996 16.008
2012 8,064 4,344 864 13,272 16.008
2016 8,784 4,788 900 14,472 17.304
2018 8,952 5,088 816 14,856 18,000
2020 9,360 5,328 852 15,540 18,816
children
2005 2,688 804 156 3,648 3,648
2008 2,676 804 168 3,648 3,648
2010 2,820 840 204 3,864 4,368
2012 2,988 876 180 4,272 4,368
2015 3,168 936 180 4,512 4,512
2016 3,228 960 192 4,608 4,608
2017 3,336 996 156 4,716 4,716
2018 3,372 1,020 168 4,788 4,788
2019 3,456 1,044 168 4,896 4,980
2020 3,528 1,068 180 5,004 5,172

In its “Eighth Subsistence Minimum Report” of May 2011, the federal government put the minimum social assistance requirement (“neuter subsistence minimum”) assumed for 2012 for a single person at a total of € 7,896 per year. A neuter subsistence level of € 13,272 was estimated for married couples and a subsistence level of € 4,272 for a child, as defined by social welfare law. The income tax subsistence minimum (basic allowance) for single persons is € 8,004; for married couples € 16,008.

In the 10th subsistence level report from January 2015, the federal cabinet decided the level of the tax-free subsistence level for children and adults. The basic tax allowance should be adjusted to this number. It rises retrospectively to January 1, 2015 to € 8,472. On January 1, 2016, it will then be increased again by € 180 to € 8,652.

International

Constructs equivalent to the basic tax allowance also exist in other income tax systems:

  • Under Australian income tax law, the basic tax credit is A $ 18,200
  • in UK income tax law, the personal allowance is £ 10,600 for an unmarried person under 65 with an income less than £ 100,000
  • In US income tax law, there are various reduction amounts that ultimately act like a basic tax allowance of USD 10,000:

Example: single person, no children, under 65 and not blind, income $ 40,000 minus $ 6,100 standard deduction minus $ 3,900 personal exemption = $ 30,000 taxable income

See also

Web links

Individual evidence

  1. ↑ The income tax rate formulas since 1958. Accessed on September 29, 2019 (basic allowances from 1958 to 2016; source: Federal Ministry of Finance).
  2. ↑ WiGBl 1949 p. 117. Retrieved on December 29, 2018 .
  3. ^ New version of the Income Tax Act 1950. Accessed December 29, 2018 .
  4. ↑ Law on the Reorganization of Taxes. Retrieved December 29, 2018 .
  5. ↑ Law on the Reorganization of Taxes. Retrieved January 3, 2019 .
  6. ↑ § 32a EStG 1975. Retrieved on August 29, 2017 .
  7. ↑ § 32a EStG 1977. Retrieved on August 29, 2017 .
  8. ↑ § 32a EStG 1979. Retrieved on August 29, 2017 .
  9. ↑ https://www.haufe.de/steuern/gesetzgebung-politik/einkommensteuer-steuerentlast-ab-2021_168_519846.html
  10. ↑ https://www.haufe.de/steuern/gesetzgebung-politik/einkommensteuer-steuerentlast-ab-2021_168_519846.html
  11. ^ The legal concept of family taxation - Wolfgang Lingemann - Duncker & Humblot - ISBN 3-428-48004-X , ISBN 978-3-428-48004-3 - page 100
  12. ↑ On the development of case law, see: Volker Neumann (Humboldt University of Berlin): Menschenwürde und Lebenminimum , p. 3 f. (PDF; 95 kB).
  13. ↑ Reiner Sans: The Federal Constitutional Court as a guarantor for family policy ( memento of the original from June 12, 2015 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. , in: The Online Family Handbook, May 8, 2015. @1@ 2Template: Webachiv / IABot / www.familienhandbuch.de
  14. ↑ a b German-speaking case law (DFR): BVerfGE 87, 153 - basic allowance
  15. ↑ German-speaking case law (DFR): BVerfGE 82, 60, 85 = No. 104 ff and BVerfGE 82, 60, 94 = recital 128 ff. In BVerfGE 82, 60 - Tax-free subsistence level ( memento of the original dated February 13, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.oefre.unibe.ch
  16. ↑ a b German-speaking case law (DFR): BVerfGE 99, 246 - Child existence minimum = Federal Constitutional Court, decision of the Second Senate of November 10, 1998: BVerfG, 2 BvL 42/93 of November 10, 1998
  17. ↑ German-language case law  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice. (DFR): BVerfGE 99, 273 - Child Existence Minimum III  ( page no longer accessible , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.@1@ 2Template: Toter Link / www.servat.unibe.ch  @1@ 2Template: Toter Link / www.servat.unibe.ch  
  18. ↑ Compare non-acceptance decision of the BVerfG of 23 August 1999 (1 BvR 2164/98)
  19. ↑ a b c cf. page 53 (or page 7 of 11 of the PDF; Table 2: tax-exempt material subsistence minimums in the previous five subsistence minimum reports ) and page 55 (or page 9 of 11 of the PDF) in: Ten Years Subsistence Minimum Report - a balance sheet , monthly report of the BMF , October 2005 (PDF, approx. 184 kB).
  20. ↑ German-speaking case law (DFR): BVerfGE 99, 216 - Familienlastenausgleich II ( Memento of the original dated August 7, 2007 in the Internet Archive ) Info: The archive link was automatically inserted and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. = Federal Constitutional Court, decision of the Second Senate of November 10, 1998: BVerfG, 2 BvR 1057/91 of November 10, 1998 @1@ 2Template: Webachiv / IABot / www.servat.unibe.ch
  21. ↑ cf. Bundestag printed paper 13/1558 of May 31, 1995 and plenary minutes 13/42 of June 2, 1995
  22. ↑ a b c d e Seventh subsistence level report : BT-Drucksache 16/11065 from November 21, 2008 - report on the level of the subsistence level of adults and children for the year 2010 (PDF; 110 kB).
  23. ↑ First subsistence level report : BT-Drucksache 13/381 from 02.02.1995 - report on the level of the subsistence level of children and families from the year 1996 (PDF; 275 kB).
  24. ↑ Second subsistence level report : BT-Drucksache 13/9561 of December 17, 1997 - report on the level of subsistence level for children and families for 1999 (PDF; 253 kB).
  25. ↑ Third subsistence level report : BT-Drucksache 14/1926 from 04.01.2000 - Third report on the level of the subsistence level of children and families for the year 2001 (PDF; 285 kB).
  26. ↑ BT-Drucksache 14/2770 - CORRECTION on the information provided by the Federal Government - Drucksachen 14/1926, 14/2607 No. 1 (PDF; 51 kB).
  27. ↑ Fourth subsistence level report : BT-Drucksache 14/7765 (new) from 04.12.2001 - report on the level of the subsistence level of adults and children for the year 2003 (PDF; 38 kB).
  28. ↑ a b c d Fifth subsistence level report : BT-Drucksache 15/2462 from 02/05/2004 - Information from the federal government: Report on the level of the subsistence level of adults and children for the year 2005 (PDF, approx. 87 kB).
  29. ↑ a b c d Sixth subsistence level report : BT-Drucksache 16/3265 from 02.11.2006 - report on the level of the subsistence level for adults and children for the year 2008 (PDF; 198 kB).
  30. ↑ a b c d e Eighth subsistence level report : BT-Drucksache 17/5550 from May 30, 2011 - report on the level of the tax-free subsistence level for adults and children for 2012 (PDF; 268 kB).
  31. ↑ a b c d e f g Tenth subsistence level report : Report on the level of the tax-free subsistence level for adults and children for the year 2016 (10th subsistence level report) ( Memento of the original from October 10, 2016 in the Internet Archive ) Info: The archive link was used automatically and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / www.bundesfinanzministerium.de
  32. ^ A b c d e f Eleventh subsistence level report : Report on the level of the tax-free subsistence level for adults and children for the years 2017 and 2018 (11th subsistence level report ) , printed matter 18/10220
  33. ↑ a b c d e f Twelfth subsistence level report