EUROsociAL – Workshop Brasilia 1 Division of German Tax Revenues And The Financial Equalization Scheme Between The Federal Government And The Länder Andrea Gebauer German Federal Ministry of Finance

EUROsociAL – Workshop Brasilia 2

EUROsociAL – Workshop Brasilia 3 Municipalities Joint taxes Corporate Income Tax (Bund 50 %, Länder 50 %, Gemeinden - %) Income Tax ( Bund 42,5 %, Länder 42,5 %, Gemeinden 15 % ) VAT (Bund 52,01 %, Länder 45,91 %, Gemeinden 2,08 %) Taxes accruing to the Länder Inheritance and gift tax Real property transfer tax Motor vehicle tax Tax on betting and lotteries Fire protection tax Local Taxes Trade Tax Real property tax Dog Tax Secondary home tax Taxes accruing to the Federation Mineral oil duty Insurance tax Tobacco duty Coffee duty Electricity duty Solidarity surcharge Länder Federation Overview Taxes Total 308 bn € Total 83.5 bn € Total 37 bn € Total 20.5 bn € Total German Tax Revenue 449 bn €

EUROsociAL – Workshop Brasilia 4 Division of Corporation Tax Revenue (2005) 8.2 bn € Taxable companies 282,000 Total Revenue 16.4 bn €

EUROsociAL – Workshop Brasilia 5 Municipalities Joint taxes Corporate Income Tax (Bund 50 %, Länder 50 %, Gemeinden - %) Income Tax ( Bund 42,5 %, Länder 42,5 %, Gemeinden 15 % ) VAT (Bund 52,01 %, Länder 45,91 %, Gemeinden 2,08 %) Taxes accruing to the Länder Inheritance and gift tax Real property transfer tax Motor vehicle tax Tax on betting and lotteries Fire protection tax Local Taxes Trade Tax Real property tax Dog Tax Secondary home tax Taxes accruing to the Federation Mineral oil duty Insurance tax Tobacco duty Coffee duty Electricity duty Solidarity surcharge Länder Federation Total 308 bn € Total 83.5 bn € Total 37 bn € Total 20.5 bn € Overview Taxes

EUROsociAL – Workshop Brasilia 6 Division of Income Tax Revenue (2005) 77.4 bn € 27.6 bn € Total Revenue bn € Number of taxpayers 24.3 m

EUROsociAL – Workshop Brasilia 7 Municipalities Joint taxes Corporate Income Tax (Bund 50 %, Länder 50 %, Gemeinden - %) Income Tax ( Bund 42,5 %, Länder 42,5 %, Gemeinden 15 % ) VAT (Bund 52,01 %, Länder 45,91 %, Gemeinden 2,08 %) Taxes accruing to the Länder Inheritance and gift tax Real property transfer tax Motor vehicle tax Tax on betting and lotteries Fire protection tax Local Taxes Trade Tax Real property tax Dog Tax Secondary home tax Taxes accruing to the Federation Mineral oil duty Insurance tax Tobacco duty Coffee duty Electricity duty Solidarity surcharge Länder Federation Total 308 bn € Total 83.5 bn € Total 37 bn € Total 20.5 bn € Overview Taxes

EUROsociAL – Workshop Brasilia 8 Distribution of The VAT Revenue I The German constitution: VAT revenue has to be shared between the Federation and the Länder according to the ratio of inevitable expenditure and current revenues 2006: 5.63 % of total revenue is assigned to the Federation to finance a subsidy to the social security pension scheme Then, 2.2 % of the remaining revenue is transferred to the Municipalities The remaining revenue is shared by the Federation and Länder at a ratio of 49.6 % to 50.4 % (except for some special fixed allowance of about € 2.3 billion from the Länder to the Federation) The EU share is financed by the Federation => Result 2006: –Federation 39.6% –Länder 44.9% –Municipalities 2.0%

EUROsociAL – Workshop Brasilia 9 VAT Shares of Federation, Länder, Municipalities and The EU

EUROsociAL – Workshop Brasilia 10 Distribution of The VAT Revenue II In a second step the VAT revenue belonging to the Länder as a whole is distributed among the individual Länder. A part of the Länder share of VAT, but not more than 25%, goes as a supplementary portion to those Länder whose receipts from the income tax, the corporation tax and other taxes per capita are lower than average. 1 The remainder of the Länder share of VAT, at least 75%, is distributed according to the number of inhabitants. 1 The exact amount of the VAT supplementary portions depends on the amount by which the per capita tax revenue of a Land falls below the average per capita tax receipts.

EUROsociAL – Workshop Brasilia 11 Länder VAT Revenues 2005

EUROsociAL – Workshop Brasilia 12 Länder VAT Revenues Per Capita 2005 in bn €

EUROsociAL – Workshop Brasilia 13 Tax Revenue of The Federation, Länder and Municipalities as Share in German Tax Revenue

EUROsociAL – Workshop Brasilia 14 Total Tax Revenue of The Federation, The Länder And The Municipalities Due to Financial Equalization Scheme Between The Federal Government and The Länder

EUROsociAL – Workshop Brasilia 15 Total Tax Revenue of The Federation (2005) 1 Transfers to Länder, Municipalities and EU 83.5 bn € bn € Federation Tax Revenue bn € bn € bn €

EUROsociAL – Workshop Brasilia 16 Total Tax Revenue of Municipalities (2005) Total Revenue 59.8 bn € 41.9 bn € 20.2 bn € bn €

EUROsociAL – Workshop Brasilia 17 Total Tax Revenue of Länder (2005) Total Revenue bn € 20.8 bn € 26.2 bn € bn €

EUROsociAL – Workshop Brasilia 18 From the FederationRecipientsPayers Baden-Württemberg---2,209 Bayern---2,219 Brandenburg+1, Hessen---1,593 Mecklenburg-Vorpommern+1, Niedersachsen Nordrhein-Westfalen Rheinland-Pfalz Saarland Sachsen+3,472+1,007- Sachsen-Anhalt+2, Schleswig-Holstein Thüringen+1, Berlin+2,810+2,441- Bremen Hamburg Transfers

EUROsociAL – Workshop Brasilia 19 Länder Tax Revenue 2005 in bn €

EUROsociAL – Workshop Brasilia 20 Länder Tax Revenue Per Capita 2005 in bn €

EUROsociAL – Workshop Brasilia 21 The End