|Germany Unveils Key Tax Changes In 2013|
Germany’s finance ministry has published an overview of key changes in the country’s tax law from January 1st, 2013.
From that date on, the government’s new electronic income tax tracking system (ELStAM) will replace paper wage tax cards. The new system will allow employee tax data, including child allowances, tax classifications, and religious affiliations, to be stored and transferred electronically.
The aim of ELStAM is to simplify the existing system, reducing paperwork for businesses and for the tax administration.
To ensure that employers are not overburdened by the transfer to the new system, they will be able to use the paper-based system until the end of 2013, and may decide to transfer all employee data immediately or progressively. However, the system must be used for all employees by December 2013 at the latest.
The government has also decided to extend fiscal incentives to promote the purchase of environmentally friendly electric vehicles. The existing motor vehicle tax exemption has been extended to all other types of e-vehicles, including commercial vehicles, lighter vehicles, and motorcycles, as long as they are powered either by battery or by fuel cell. The tax exemption will apply for ten years.
The measure will apply retroactively to all e-vehicles registered from May 18, 2011. E-vehicles registered from January 1st, 2016 will benefit from a five-year exemption.
Other changes in 2013 include the introduction of a simplified tax assessment system for married couples. These couples will be able to choose between submitting a joint or an individual tax assessment, replacing the separate tax assessment regime from 2013. In addition, the procedure has been improved and the processing time shortened.
Finally, pension insurance contributions will fall for employees in 2013 from 19.6% to 18.9%, and the contribution rate for statutory care insurance will rise by 0.1% from 1.95% to 2.05%.
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Published on our website on January 5, 2013