Basic tax allowance (Germany)
|Years||Basic tax allowance
|1949–05 / 1953||750 DM|
|06 / 1953-1954||800 DM|
|1978||3,329 DM (3,839 DM)|
|1979-1980||3,690 DM (4,200 DM)|
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 ( 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:
- Standard requirement
- Needs for education and participation of children
- Accommodation costs (gross rent or comparable expenses for home or apartment ownership in an appropriate amount)
- 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 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
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.
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
- Income tax rate
- Allowance , child allowance
- Cold progression
- Performance principle (taxation based on performance)
- Tax justice
- Net principle (tax law)
- Seventh subsistence level report : BT-Drucksache 16/11065; Information from the Federal Government: Report on the subsistence level of adults and children for 2010 (PDF; 205 kB), November 21, 2008.
- Marie-Luise Hauch-Fleck: Calculate until it fits • The federal government manipulates the subsistence level - to the detriment of all taxpayers. In: Die Zeit (No. 01/2007) of December 28, 2006.
- Jürgen Borchert: On the situation of families: A plea for radical structural reform in family policy! (PDF) • Diaconal work of the Evangelical Church in Baden eV, Congress in Heidelberg on November 23, 2004.
- Jürgen Borchert, Heidelberg: Compatibility of work, family and private life • From “gender mainstreaming” to “family mainstreaming”? (PDF; 103 kB), public hearing, Brussels January 25, 2006.
- Böckler Impulse Edition 20/2007: Tax Law • Family support: two measures.
- The income tax rate formulas since 1958. Accessed on September 29, 2019 (basic allowances from 1958 to 2016; source: Federal Ministry of Finance).
- WiGBl 1949 p. 117. Retrieved on December 29, 2018 .
- New version of the Income Tax Act 1950. Accessed December 29, 2018 .
- Law on the Reorganization of Taxes. Retrieved December 29, 2018 .
- Law on the Reorganization of Taxes. Retrieved January 3, 2019 .
- § 32a EStG 1975. Retrieved on August 29, 2017 .
- § 32a EStG 1977. Retrieved on August 29, 2017 .
- § 32a EStG 1979. Retrieved on August 29, 2017 .
- The legal concept of family taxation - Wolfgang Lingemann - Duncker & Humblot - ISBN 3-428-48004-X , ISBN 978-3-428-48004-3 - page 100
- On the development of case law, see: Volker Neumann (Humboldt University of Berlin): Menschenwürde und Lebenminimum , p. 3 f. (PDF; 95 kB).
- 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.
- German-speaking case law (DFR): BVerfGE 87, 153 - basic allowance
- 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.
- 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
- 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.
- Compare non-acceptance decision of the BVerfG of 23 August 1999 (1 BvR 2164/98)
- 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).
- 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
- cf. Bundestag printed paper 13/1558 of May 31, 1995 and plenary minutes 13/42 of June 2, 1995
- 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).
- 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).
- 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).
- 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).
- BT-Drucksache 14/2770 - CORRECTION on the information provided by the Federal Government - Drucksachen 14/1926, 14/2607 No. 1 (PDF; 51 kB).
- 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).
- 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).
- 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).
- 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).
- 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.
- 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
- Twelfth subsistence level report