German tax system. Principles and main types of payments

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Each country has its own special principles of taxation, which are based on certain rules. The German tax system in this respect, according to some experts, is the most reasonable and "humane".

I would like to note that this text will outline only the basic principles of the tax system, as well as the main types of taxes. Calculation formulas and complex coefficients are the subject of a larger study. Our goal is to get a general idea.

The modern German tax system was born after World War II in the territory of Germany and currently exists almost unchanged, with the exception of a number of amendments that were made to it taking into account the requirements of the existing reality.

As you can read in most sources, the foundations of the system were laid by the end of the 40s of the last century by Ludwig Erhard. It was he who voiced the basic principles that should guide (and guide) the German tax system. If you do not delve into economic and other specific terms, then they are as follows:

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  Any tax inGermany, as well as the funds needed to collect it, should be an amount, the size of which is minimized. The amount of tax, at the same time, must correspond to the amount of services provided by the state to its citizen.

• Taxes should aim at equitable distribution of profits, cannot prevent he althy competition.
• The tax collection system should be non-double taxed and consistent with structural policies.
• Taxation should take into account the interests of citizens' privacy.

What taxes exist

Germany in the field of taxation is focused on a number of deductions that can be divided:

• By direction - federal, municipal, land and collective taxes. Church tax occupies a separate place in this category.
• Property taxes - on income (income on wages and on turnover from capital), corporate, trade and church, as well as solidarity surcharge.
• Taxes on property - on property itself, on land, on inheritance, trade and church.
• Commodity-money tax deductions - sales tax, on automobiles, fire protection, on the purchase of land, from gambling houses and other types of entertainment facilities, lotteries and horse races, on insurance.
• Customs duties and fees for consumer goods - for the import and export of goods, a number of alcoholic beverages, semi-finished products, mineral oils, coffee.

The German tax system taxes its citizens in almost all sectors of theirlife. According to the data of various analytical agencies, the share of tax revenues in this country ranges from 80-89% (figures are ambiguous, due to different ways of estimating the parameters). To say that this system is flawless or, on the contrary, has a number of shortcomings, only residents of the state and people who are qualified specialists in this field have the right. This text is just a brief description of a small part of the German financial system.