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Country Rankings - Germany

  • Jun 28, 2018   Germany: squib

    A bit like a gift nobody really wants and can certainly live without, proposals for a common corporate tax base in the European Union have been repackaged and re-presented multiple times. And it looks like the CCTB could be the gift that keeps on giving for us commentators, after the French and German governments recently got their hands on the Commission's draft proposal and decided to make an already complicated issue more complex. One observation to make is that the Franco-German CCTB position paper was probably significant for what it didn't mention. Much to the relief of Ireland, Hungary, and Bulgaria, there was no mention of a minimum EU corporate rate of corporate tax, a measure that would have been intended to put a stop to aggressive tax rate competition and the "race to the bottom" on the corporate tax rates. Nevertheless, for an idea that is already hugely ambitious, controversial, and divisive, the position paper probably couldn't have helped the common tax base cause by substantially departing from the Commission's draft directive in some key areas, notably by calling for all companies liable for corporate tax to be included in the common tax base, regardless of size, and by envisaging a CCTB without tax incentives such as R&D incentives. As such, by wrapping up the idea of a CCTB in the wider project for deeper EU harmonization, France and Germany may merely have succeeded in prolonging what are likely to be very protracted discussions in the matter. Indeed, it has been suggested that the Franco-German position paper is such a substantial departure from the Commission's recently repackaged proposal, it may well need to be re-re-packaged, and re-re-re-launched. If so, I recommend that the EU makes it a low-key affair. For one thing, everyone now knows what's behind the packaging – they've seen most of it before and were pretty disappointed then. What's more, the timing isn't great. Apparently, there's something of a CO2 shortage in Europe at the moment, so this is one launch party that could go down like a damp squib rather than a pop in more ways than one.
    Source: https://www.tax-news.com/news/Germany_France_Issue_New_EU_Common_Corporate_Tax_Proposals____86849.html

  • May 15, 2018   Germany: unpromising

    There are exceptions to the rule that tax cuts come before elections. For instance, this was the case in Germany. There, the previous grand coalition government promised little in the way of tax cuts prior to last year's parliamentary elections. And the new grand coalition has certainly delivered on that lack of promise. It emerged last week that personal income taxpayers can look forward to nothing more than tax threshold tweaks to counter the effect of fiscal drag in the next year or so. Yet, it's not as if there isn't scope for tax cuts. Substantial scope in fact. Governments at federal, regional, and local level are awash with tax revenue, thanks to a strong national economy. And according to the OECD's recent Taxing Wages report, Germany has one of the highest tax burdens on personal income in the grouping, a distinction surpassed only by Belgium and Denmark. It's rate of corporate tax is also beginning to look out of step with much of the world, especially after the tax cuts in the United States. However, thanks to a determination not to let its coffers deplete a second time after bailing out crisis-hit Europe a few years ago, and a belief that tax revenues are extremely sensitive to global events, fiscal conservatism now seems firmly embedded in the psyche of the German Government, at least as far as the Christian Democrats and its leader Angela Merkel are concerned. For taxpayers, this dogged commitment to prudence is something of a double-edged sword. On the one hand, at least taxpayers can be reasonably confident that nasty surprises won't jump out at them further down the pike. But, on the other, don't hold your breath waiting for a tax cut – at least not a significant one. It's also worth noting how, in its last report on the German economy, released a couple of months prior to the 2017 elections, the IMF made several references to the need for Germany to now cut taxes on workers, rather than the other way around. That Germany chose to largely ignore the IMF's (rare) advice to cut tax demonstrates that some things certainly don't change!
    Source: https://www.tax-news.com/news/Germany_To_Provide_Tax_Relief_In_2019____76770.html

  • Jan 16, 2018   Germany: underwhelming

    However, more recent developments have highlighted the limitations of coalitions, especially when the parties involved are on different political pages. Denmark's Prime Minister, Lars Lokke Rasmusen, for example, was forced into an embarrassing climb-down last week on tax after a coalition partner decided not to play ball. And in Germany, after September's inconclusive election, and months of fruitless coalition talks, lawmakers look set to unveil an utterly underwhelming grand coalition agreement as far as tax reform is concerned, which likely speaks of the CDU's fiscal conservatism rubbing up against the SPD's urge to splurge the surplus. 
    Source: https://www.tax-news.com/news/Germany_Hints_At_Solidarity_Tax_Cut____76208.html

  • Oct 10, 2017   Germany: open-mouthed

    There can't be many areas of life left that the taxman doesn't already know or have the right to demand information about. If you are employed in Germany for example, tax authorities even want to know what you're having for breakfast. But as it turns out, defining something as easily identifiably as "breakfast" is by no means straightforward, and in Germany it has gone all the way to court. So what is "breakfast" for tax purposes? According to judges in the German city of Munster, as far as German law is concerned, you're having breakfast the moment a dairy-based spread or fruit preserve makes contact with a bread roll, or, better still, if some cheese or cold meat is involved too. Dry rolls washed down with coffee, as offered by the appellant taxpayer to its employees in this case, is sustenance of sorts, but fruhstuck it's not. Why is this distinction important? Because if a company gives its workers "breakfast" for free, this could be a taxable event, depending on the sums of money involved. Evidently then, what passes for breakfast in the tax offices of Nord Rhein Westphalian is a far cry from the lavish butter and sausage-fueled spreads enjoyed by the state's justices. Also, it's a clear indication that something is seriously amiss when tax authorities and taxpayers are prepared to spend large sums of money arguing at great length over something that, to a tax layman, must look trivial and utterly absurd. But such cases are far from unique, and they often involve food. For example, countless hours have been spent in the United Kingdom arguing over the value-added tax status of sweetmeats called Jaffa Cakes, not to mention teacakes and Pringles. I bet someone warned this would happen when the first tax codes were legislated for in the 19th and 20th centuries. Still, the often sublimely ridiculous world of tax keeps people like us in a job, I suppose, so I shouldn't complain too much.
    Source: https://www.tax-news.com/news/German_Court_Rules_CompanyProvided_Breakfast_Not_Taxable____75432.html

  • Oct 03, 2017   Germany: indecisive

    Germany is an interesting one in this respect. The CDU-led Government has stubbornly refused to loosen the fiscal reins in order to build up a budgetary buffer, in spite of successive pleas by economists to show a little mercy to long-suffering taxpayers. But the CDU is about to get into bed with a party calling for an aggressive tax-cutting policy in the form of the FDP. And joining them will be the Green Party, with its own distinct ideas on taxation. Just how this will play out is uncertain. Some tax cuts are possible, with the CDU having pledged a moderate reduction in the personal income tax burden. However, if the parties simply can't agree at a more fundamental level, the most likely result will be little in the way of change. German taxpayers will be used to that.
    Source: https://www.tax-news.com/news/Economists_Urge_Germany_To_Cut_Tax____75368.html

  • Jul 18, 2017   Germany: solid

    They say that there's no such thing as a temporary tax hike. If so, the corollary to this maxim should be that there's no such thing as a permanent tax cut. The reality is that life isn't quite as simple as that, and governments aren't always as mean to taxpayers as is often made out (including by this commentator!). We've had two examples of countries not living up to this rule of thumb in recent days and weeks. In one of potential significance, Germany's Christian Democrat Union (CDU) has proposed phasing out the far-from-beloved solidarity tax, which was introduced as a fiscal buffer when the East Germany's basket case of an economy began to merge with the West more than 25 years ago. Looking in from the outside, it would be hard to disagree with those who say that the solidarity tax has served its purpose. Aside from small remnants of the Berlin Wall, and the austere Soviet architecture in the city's east, if you walked the streets of the German capital today without any knowledge of the city's history, there'd few clues to its former divide. Statistics do show that the East German economy still lags West Germany's quite substantially. According to The Economist, in 2015, on the 25th anniversary of the fall of the Berlin Wall, GDP per capita in the East was two-thirds of that in the West, and unemployment was also significantly higher.  At the same time though, the same figures indicate that the economic lot of easterners has improved markedly since reunification, and in terms of infrastructure, the East is more or less up to Western standards. What's more, as The Economist points out, Germany is probably no more economically divided between east and west now as Italy or the United Kingdom is between north and south. So maybe the "soli" has done its job. On the other hand, there will be those who will argue that the CDU's proposal is nothing more than a cynical election ploy, and that it shouldn't be playing politics with such an important and symbolic measure. It could be said that the "soli" is more than a mere revenue raiser, and represents the spirit of solidarity between East and West. But then it was never intended to be a permanent tax. So perhaps the CDU deserves some credit for breaking one of the fundamental unwritten tenants of taxation – "thou shalt not repeal a temporary tax."
    Source: http://www.tax-news.com/news/Tax_Cuts_In_Merkels_Election_Manifesto____74645.html

  • May 23, 2017   Germany: fat end of the wedge

    Time and again countries are urged to reduce the tax burden on labor and transfer it to indirect taxes such as VATs and GSTs. But recent evidence suggests that the opposite might be happening. Barely a month goes by without a supranational economic organization – typically the OECD, the IMF or the World Bank – advising one country or another to cut taxes on labor. In May 2017 alone the IMF has: urged Slovenia to increase its capital gains, real estate, and excise tax burden to raise funds for labor tax reform; recommended that Germany reduce its "large and increasing tax burden on labor" to boost employment; and informed the Czech Republic that its labor taxes discourage women from entering the work place. However, the evidence is also contradictory. Because according to the OECD's latest Taxing Wages report, published in March 2017, taxes on labor income for the average worker across the OECD fell for the third consecutive year during 2016, dropping to 36 percent of labor costs. Nevertheless, the average figure masks the fact that the labor tax "wedge" – income taxes plus social security charges minus welfare benefits as a percentage of overall labor costs – increased in 20 OECD countries last year, and fell in only 14. In fact, research results published by the OECD in November 2016 show that tax revenues collected in advanced economies have continued to increase from last year's all-time high, with taxes on labor and consumption now accounting for a substantially greater share of total tax revenues. Meanwhile, corporate tax revenues plummeted from 23.7 percent of overall revenues to just 8.8 percent in 2014. This shows how countries have competed quite aggressively for investment with corporate tax cuts in the post-crisis era. But it also indicates that, given overall tax burdens appear to be rising rather than failing, the burden of taxation is often merely shifted elsewhere when taxes are cut, seemingly to payroll taxes and indirect taxes. It also shows how taxpayers often receive from governments with the one hand, but pay them back with interest with the other!
    Source: http://www.tax-news.com/news/German_Labor_Tax_Burden_Too_High_IMF_Says____74294.html

  • Apr 20, 2017   Germany: overtaxed

    However, it is harder for governments to ignore the advice of economists when there is a consensus, or at least something like approaching one, on a certain issue. Otherwise, when economists are split, policymakers can pick and choose the theories they like, and discard the ones they don't. So, I wonder what the German Government will make of the latest official economic forecast compiled by five different economic research institutions, which effectively concluded that Germany is overtaxed. If it was a time of fiscal austerity for Germany, like it is in much of the rest of Europe, then I suppose it could easily rebuff the economists' position on tax by simply saying "sorry, we need the money." Awkwardly for Chancellor Merkel and Finance Minister Schauble though, Germany announced a record post-reunification budget surplus for the year 2016, and all the indications are that a growing German economy will continue to strengthen tax revenues in the years ahead. Nevertheless, as far as Merkel and her Finance Minister are concerned, this changes nothing. Indeed, they just need to add two words: "sorry, we need to keep the money." Perhaps it would be better to ask German taxpayers themselves what they made of the institutes' conclusions. They probably see the situation rather differently. According to the latest Taxing Wages Report from the OECD, the combined personal income tax and social security burden the "tax wedge" was just a shade under 50 percent for a single childless worker in Germany in 2016, the second highest in the OECD grouping of 35 countries, and well above the average rate of 36 percent. "Isn't it about time for a tax cut?" I expect many would respond. While the German Government does appear to be lining up a tax cut package this year, it's a relatively minor one, focussed on alleviating bracket creep. It's also an elections year. Coincidence? Germany's strong commitment to fiscal responsibility is laudable while the fires of the eurozone crisis continue to smolder on its fringes. But the institutes' latest report suggests that the Government is going to find calls for more meaningful tax cuts harder to ignore, and the current policy could backfire on Merkel's Christian Democrat Party if pursued too doggedly.
    Source: http://www.tax-news.com/news/German_Economic_Institutes_Call_For_Tax_Cuts____73990.html

  • Mar 08, 2017   Germany: surplus

    The German Government deserves much credit for the prudent management of its budget, and of its economic affairs in general, which has resulted in a record post-reunification budget surplus of EUR24bn (USD25.3bn). But I could also mark the country down for its extreme reluctance to share the surplus in the form of tax cuts. And there's plenty of scope for those. According to Paying Taxes, an average-size company in Germany hands over just under 50 percent of its profits in income, labor, and other taxes. What's more, individuals face a top rate of 45 percent, plus the solidarity surcharge and social contributions. The counter argument is that some of the best public services in the world must be paid for somehow, and that somehow is inevitably through taxation – a bargain accepted in northern Europe much more than it is anywhere else in the world. But there is of course another reason why "Mutti" Merkel is keeping such a tight grip on the purse strings. And that is Germany's role as the Eurozone's fiscal firefighter. Yes, we might not hear about the crisis in Greece, and the problems afflicting Italy, Spain, and Portugal so much anymore, but the fire is still smoldering below the surface, and many believe it could erupt again at any moment. There is an election coming up though. So we can expected the usual promises of minor tax relief, to be delivered through tweaking tax allowances and thresholds, but not much more than that I suspect.
    Source: http://www.tax-news.com/news/Germany_Posts_Record_Budget_Surplus_For_2016____73592.html

  • Oct 04, 2016   Germany: culpable

    If Australia were in the European Union, it might not be allowed to get away with a caper like the backpacker tax. Because as a member of the Single Market, it would be prevented from treating its own taxpayers differently to those of other member states. In such a scenario, it could well find itself the recipient of a "reasoned opinion" from the European Commission, followed by a request to change the offending legislation. And if it wasn't careful, it could find itself hauled up in front of the European Court of Justice, because there's one thing that the Commission won't be, and that's ignored. This is what Germany found out recently when the EC took severe umbrage at its lack of a response to concerns about the compatibility of a new road pricing scheme with EU principles. Whether you agree with the Commission, and its increasingly aggressive policing of the EU tax framework, I suppose, ultimately, Germany has only itself to blame here, firstly for not properly thinking through its plans, and secondly by hoping that the Commission would eventually just go away. But the Commission rarely just goes away. What's more, it tends to fight cases to the bitter end, increasing uncertainty facing travelers to and from Germany, as well as businesses. Still, what I find never seems to happen is the Commission hauling member states across the coals for discriminating against its own taxpayers. Take the UK for example, where drivers, particularly in the haulage sector, have long complained that European motorists, used to paying tolls to maintain trunk roads in their own countries, get to drive the largely toll-free highways and byways of Britain without shelling out a penny in taxes or fees for up to six months (after which they must register their vehicle, although the requirement was rarely enforced until recently). Meanwhile, keepers of British-registered vehicles are subject to an annual road tax. Yet, the Europeans don't reciprocate this apparent generosity by exempting Brits from toll charges on their first few forays down the autoroutes, autopistas, and autostradas of the EU. No wonder so many of them are upset!
    Source: http://www.tax-news.com/news/Germany_Referred_To_ECJ_Over_Road_Charging_Scheme____72355.html

  • Aug 18, 2016   Germany: double standards

    Here we go again. Another moral dilemma in government. The German state of North Rhine-Westphalia has disseminated personal financial information belonging to 160,000 suspected tax evaders to 20 countries, presumably all over the world. Was it justified in doing so? Some people might see this as a black and white issue, an open and shut case whereby tax evaders should be punished regardless of the means of capture. For me, however, this is a very gray area. The statement which accompanies NRW's announcement doesn't go into too much detail about how it came about this treasure trove of information on Luxembourg bank accounts. It only mentions an anonymous source. Given these leaks are hardly unprecedented, we are to assume that a familiar sequence of events occurred. The whistleblower in question, likely an employee of a bank with a wealth management arm, or a former employee of one, felt morally compelled to fill up a USB stick with bank account details of mainly wealthy people that, the allegation goes, have invested in structures to help them evade tax. Said details are then passed to a tax authority, in this case the NRW tax office, who throws the book at the exposed offenders. I'm choosing my words carefully here though, because you could equally look at this chain of events a different way. A disgruntled employee/ex-employee of the bank in question, in flagrant disregard of data protection and confidentiality laws, willfully stole sensitive personal financial information of a huge number of people, some of whom may have avoided/evaded tax, but many of whom may be perfectly innocent. Complicit in the crime, tax authorities willingly receive and share this private information, in effect handling stolen goods. And they may pay the perps handsomely for the privilege. These are two very different interpretations, and I've got a feeling if you are inclined to believe the latter, you're in a minority these days. But where do you draw the line? When is it appropriate for the privacy of the many to be compromised to winkle out the law-breaking few? And what sort of example are governments setting when they are prepared to set aside laws that they expect the majority to abide by in pursuit of the bad guys? A moral dilemma, indeed. But I suppose one person's whistleblower is another person's thief.
    Source: http://www.tax-news.com/news/Mass_Bank_Account_Data_Shared_By_German_State____71928.html

  • Jun 01, 2016   Germany: green

    Now, nobody could accuse me of being a tree-hugging environmentalist, but I do genuinely look forward to the day when technology has advanced far enough that we no longer have to burn things to keep warm (or cool), keep the lights on, and keep moving. However, unless powerful incentives are going to be provided to encourage the switch to clean and renewable power forms, both by individuals and businesses, then that carbon-free world is getting farther away all the time. Take hybrid and battery-powered cars – they have come on leaps and bounds in the last two or three years, and can now do most things that time-honored gasoline-powered vehicles can. But there are still limitations curtailing their wider take-up by consumers, more so in the case of electric cars. One is the relative lack of charging stations, and the length of time it takes to recharge – even at the most advanced high-speed recharging units, you've got time for a leisurely coffee, and maybe even a stroll around the shops. And, electric cars are still relatively expensive. Ideally, revenue from carbon taxes should be plowed straight back into schemes to make the technology more affordable and to invest in the necessary infrastructure. Germany has set quite a good example with its recently announced tax incentives and subsidies. Now it's up to other governments to put their money where their mouth is, and follow Germany's example. They could start by swapping the gas-guzzling ministerial sedans for a fleet of hybrids, or chartering a balloon, instead of a 747, to send the Premier to the next climate conference.
    Source: http://www.tax-news.com/news/Germany_Charges_Up_Electric_Car_Tax_Breaks____71268.html

  • May 03, 2016   Germany: rebellious

    Staying with the theme of transparency, it was encouraging to see German Finance Minister Wolfgang Schäuble rebelling against European Commission proposals for public country-by-country reporting at the latest meeting of EU finance ministers, given the weight of Germany's voice in the EU. It's going against the grain these days to question the call for greater corporate transparency. And perhaps there's an argument that multinational firms could benefit from being more open about their activities from a public relations point of view, in much the same way as offshore jurisdictions like Guernsey have. Yet, as Schäuble suggested, there has to be a balance between "transparency and practicality." As Schäuble pointed out to his counterparts in Brussels recently, publishing sensitive company information in the public domain could lead to all sorts of unintended consequences, such as "lining someone up to be pilloried publicly."
    Source: http://www.tax-news.com/news/ICC_Concerned_About_EC_Proposals_On_Tax_Data_Disclosure____70996.html

  • Apr 18, 2016   Germany: knees jerk

    Abroad meanwhile, the response of the major powers to the leak of the Panama Papers has been as depressing as it has been predictable, typified by Germany's "10-point Plan" and France's call for yet another blacklist – because they've worked wonders over the last 20 years, haven't they! Needless to say, it has largely been a knee-jerk, ill-considered response, which plays to the gallery of an angry public braying for blood. Another, more worrying thought occurred to me as I considered the fallout from the Panama leaks: perhaps we are truly heading for an age of total transparency. The thought sent shudders down my spine, and still does. But there is a kind of dark logic supporting the idea. We have seen some of the world's largest and most sophisticated organizations, including multinational companies and governments, succumb to computer hackers in the recent past. And such data breaches are on the rise. According to online security firm Symantec, almost 430m personal records were stolen from computers last year. However, the really disturbing finding was that the number of companies refusing to disclose whether they had been hacked jumped 85 percent, so it is likely that the real figure is much higher. There has already been talk in certain countries, including in the UK, that tax returns – traditionally that most private of documents, next to one's medical records – should be made public. It happens in Norway, and they seem pretty happy about it. But why don't we go the whole hog and make everything transparent. Perhaps if things were made more transparent, there'd be fewer opportunities for hackers.
    Source: http://www.tax-news.com/news/Germany_Announces_10Point_Tax_Evasion_Plan____70942.html

  • Mar 22, 2016   Germany: bad tax

    So, I'm hardly the person to stick up for the global aviation industry, which has had its fair share of troubles since the financial crash. But, I do feel some sympathy for it. Typically, the sector's profit margins are wafer thin, so I can understand the rush to "no frills" flying. And it certainly doesn't help when governments decide to stick ill-thought-through and arbitrary taxes on aviation, more especially on passengers themselves. As reported last week, IATA hit out against Germany's flight ticket tax, which is, ostensibly, an "environmental" tax. However, it's hard to say whether it has stopped people flying from German airports (and, as the theory goes, reduced aviation emissions), because the statistics probably don't reflect those who are now flying long-haul from the Netherlands, or Belgium, or France, or Denmark etc., etc. Perhaps the most cynical and onerous aviation tax is the UK's APD, another supposedly "green" tax , which has done not a shred of good for the environment but which is netting the Treasury about GBP2bn a year in revenue. This adds up to GBP142 to the price of a ticket for a journey of more than 2,000 miles, and must considerably hike up the cost of a family vacation beyond Europe. Indeed, various Caribbean governments have lobbied the UK hard over this issue, having seen a noticeable dip in tourist numbers. What is particularly pernicious about APD is that the Government knows it has a captive audience; when you live on an island, there's no nipping over the border to the nearest French or Dutch airport, as the Germans reputedly do. However, this state of affairs may not last much longer, if the devolved Scottish Government exercises its power to reduce or eliminate APD in Scotland. I sincerely hope it does. Glasgow Airport could be about to get very busy.
    Source: http://www.tax-news.com/news/Germany_Urged_To_Scrap_Flight_Tax____70728.html

  • Jan 25, 2016   Germany: prevaricates

    At an IMF conference in Peru last year, Schäuble told Reuters that a crisis tax was a "matter for the European Commission," but nonetheless the problem of under-resourced EU budgets "must be solved." Last week, he appeared to come off the fence by supporting an EU tax on gasoline to help those member states most in need. However, judging by the contents of a speech at the "The Future of EU Finances" in Brussels, he was standing on the other side of the fence just a couple days earlier. "It has been argued that a new source of revenue like an EU tax is necessary to provide more money for Europe," Schäuble said. "This sounds like a convincing argument but it is not correct. There is no need for new sources of revenue like an EU tax to provide additional money for Europe." For my money, that sounds a lot like a definitive rejection of an EU crisis tax. Or perhaps he just meant there is no need for a general EU-level tax, which might leave the door open to special "crisis" taxes. Who knows. But after a good run, the confusion earns Germany a rebuke this week. We could dissect Schäuble's comments to the nth degree but the results would be largely academic anyway. An EU tax is unlikely to happen, crisis or no crisis, because certain member states are bound to oppose it. The crisis tax question does, however, indicate that there are growing cracks in Germany's leadership and the hitherto rock-solid Merkel is suddenly looking vulnerable, and slightly at a loss as to how to deal with the migration issue.
    Source: http://www.tax-news.com/news/Germanys_Schuble_Calls_For_EU_Petrol_Tax____70194.html

  • Jan 18, 2016   Germany: in credit

    And finally, another acknowledgment of German fiscal prudence is due, with the news that the federal Government has achieved its second consecutive budget surplus. I admit to berating Germany in the not-too-distant past for being, frankly, a bit of a scrooge by steadfastly refusing to share the fruits of its bountiful tax revenues with the country's long-suffering taxpayers, who haven't seen anything resembling a tax cut for what must feel like an eternity to them. Okay, tax thresholds were recently updated to counter "fiscal drag," effectively giving taxpayers a EUR2bn (USD2.2bn) tax cut. But that doesn't really count in my book. Still, it's probably just as well Merkel and Schuble were hell-bent on delivering a budget surplus given that the Government plans to spend EUR7.2bn on processing and accommodating the hundreds of thousands of people who have sought political asylum in the country. And this is on top of the EUR5bn it has already spent. As the saying goes, make hay while the sun shines, and the German Government has certainly accumulated a useful haystack during a period of relatively stability in the eurozone's recently turbulent history. And, it'll need it if the financial and economic gloom and doom predicted for 2016 by an increasing number of analysts comes to pass. Indeed, I read recently that one analyst at a UK-based bank has urged clients to sell "everything" before the bottom falls out of the markets. Over-excited? Maybe. Or perhaps he or she is one of those people who likes to relax after work by pounding the streets wearing a sandwich board bearing the words "the end is nigh." But my point is this: as individuals, we're told to save for a rainy day. This applies to governments, too, as we found out to our cost in 2008. At least Germany has learned its lessons.
    Source: http://www.tax-news.com/news/No_Need_For_German_Migrant_Tax_Figures_Suggest____70171.html

  • Dec 14, 2015   Germany: wise

    Angela Merkel, on the other hand, is the one you want around when you've got an economic crisis on your hands (although you might not agree if you live in Greece). If you're not convinced, just take a look at the conclusions of a study by the UK's Institute of Fiscal Studies into the fiscal adjustments made by some key EU economies since the recession. Predictably, the data shows that Italy and France have attempted to tax their way out of their respective fiscal crises, hiking taxes by about 5 percent of GDP, while the UK has instead chosen to squeeze public spending by a similar amount. The report also lays bare the sacrifice made by the Irish, who have experienced a fiscal consolidation program totaling nearly 20 percent of GDP all told. Remarkably however, as far as Germany's state finances are concerned, it's as if the financial crisis never happened. In fact, the IFS's data shows that net taxes have fallen slightly, and while spending has been cut as a percentage of GDP, it's barely a blip when measured against some of the other countries in the study. This is all the more extraordinary when you think that Germany has been bankrolling Greece for a number of years, as well as propping up the weaker parts of the Eurozone. As the beating heart of the European "project," and a supporter of some the EU's dafter ideas on tax, Germany doesn't often get a lot of praise in this column. But you have to hand it to Merkel – she's a mighty fine housekeeper. No wonder the German's call her "Mutti."
    Source: http://www.tax-news.com/news/Recession_A_Missed_Opportunity_To_Improve_Tax_Says_IFS____69920.html

  • Jun 08, 2015   Germany: deceitful

    With very few aspects of our lives now free from the binds of taxation (although the extent to which you are taxed of course depends heavily upon where you live), politicians are becoming increasingly imaginative when they need to extract yet more revenue from their citizens and subjects. For instance, I'll wager that the finance ministry officials who dreamt up Germany's new road toll scheme, which was recently approved by the Bundesrat (unofficially the upper House of Germany's legislature), had their thinking caps on for a while. The idea behind the new road toll is to get foreigners using Germany's highways to contribute towards the upkeep and improvement of the road network. However, discriminating against foreigners by making them pay more tax than nationals is illegal under European Union law, so Germans will have to pay the road toll too. Except, effectively, they won't. The thinly disguised deceit the Government has used, in an attempt to pull the wool over the eyes of the European Commission, means that Germans will pay less in existing road tax to offset the cost of the new road toll. Brussels of course has seen right through the ruse, and is expected to challenge the road toll within the next few months. How the German Government didn't expect this remains something of a mystery. Or perhaps they did and just plan to rake in as much revenue from the toll as possible before the case gets to the Court of Justice. More alarming perhaps is that Germany resorted to this measure in the first place. Germany already has one of the highest tax burdens in the world, with total tax revenue equal to 40 percent of the economy. Where on earth is all the money being spent? Greece?
    Source: www.tax-news.com/news/EU_Likely_To_Challenge_Germanys_Road_Toll_Plans____68251.html

  • Nov 13, 2014   Germany: unconstitutional

    "The law is an ass" we say in English when the strictly correct application of legal principles by a court leads to a result that any normal right-thinking person would think is absurd; and the German Constitutional Court has just brayed very loudly in saying that the country's air travel ticket tax does not offend against the constitutional rights of citizens or the airlines. Maybe so, but it and the Court offend against common sense. All taxes are an offence against citizens' rights when the government that levies them spends the money it collects in a wasteful and unprincipled fashion by providing bread and circuses to voters in order to stay in power, and by that definition most of the money Germany collects is unconstitutional, as is the case in virtually all "advanced" democracies. Well, I won't mount that particular hobby-horse today (next week, promise) but will stay focused on the insanity of a tax which purports to benefit the environment but is an anti-consumer and counter-productive money-grab. As to the environment, which is none of government's business, you won't be surprised to hear me say, study after study has shown that the only environmentally effective way of taxing air travel is to charge by the plane-load, which relates cost to CO2 creation. To give a rare bouquet to the European Union, that is exactly what it tried to do with its Emissions Trading Scheme, which was shot down by an unholy alliance between airlines and competing countries, including the US in particular. The ETS is now in limbo, but a number of individual European countries are feeding at the air travel ticket tax trough. In almost every case, they charge more for longer flights, roughly in proportion to distance travelled, which makes less sense than you might think, given that short flights are far more polluting per kilometre than long ones. Their rationale of course is to keep the tax roughly proportional to ticket cost, but it doesn't work because of the ever-cheaper low-cost airlines. It's everyone's experience by now that the taxes on a ticket are often greater than the travel cost, and it's this that hurts airlines and airports near borders with lower-tax countries. In Germany's case, it is surrounded by such, in particular the Netherlands and Belgium, which abandoned their own ticket tax systems when they saw passengers deserting their airlines in droves. The German state of Rhineland-Palatinate, which borders Belgium, and is a short drive away from the Netherlands, brought the case, and has been rebuffed. The UK, which has the highest ticket tax in the EU, at least has the excuse that it's surrounded by water. But in the end there is no excuse for this damaging and hurtful tax.
    Source: www.tax-news.com/news/German_Air_Travel_Ticket_Tax_Lawful_Says_Court____66325.html

  • Oct 30, 2014   Germany: scrooge-like

    Isn't it about time that Germany's long suffering taxpayers got a bit of relief? As with much of Northern Europe, there is a consensus in Germany that if you want some of the best and most efficient public services in the world, then you have to pay for them through taxation. Even so, it is no secret that Germany is one of the world's most-taxed nations, and yet the Government has steadfastly refused to offer even the most modest relief despite state coffers seemingly filled to the point of bursting by successive increases in tax revenues, including, as official figures show, an almost 5 percent year-on-year rise in September 2014. The Government's stance on tax cuts was reaffirmed by Finance Minister Wolfgang Schäuble back in May this year when he said that, apparently, the Government doesn't have enough fiscal room to even raise income tax thresholds, a perennial gripe of German taxpayers. The Government's absolute priority, said Schäuble, is balancing the budget by 2015. And when you look around the eurozone and see the basket case that various parts of it are becoming economically, I suppose you can't blame the German Government for this fiscally conservative stance. It was Germany after all that financed a substantial chunk of the Greek bail-out, and recent economic data from the Eurozone must have sent a few shivers down the spines of the Finance Ministry's top brass. Then again, perhaps releasing the fiscal brake a little might actually help a Germany economy slipping into stasis.
    Source: www.tax-news.com/news/Germanys_Tax_Income_Continues_To_Rise____66193.html

  • Aug 14, 2014   Germany: cold progression

    Governments certainly benefit from being rather lazy with tax thresholds, which somehow seem to move much slower than earnings growth, so that more and more people fall into higher rate tax bands each year. This phenomenon is usually referred to in tax circles as "bracket creep," when tax bands fail to keep pace with wage inflation. Germany has its own phrase for it however, which translates as "cold progression." But while Cameron has at least expressed a desire to thaw the cold progression, the German Government has consistently rejected all calls to give German taxpayers a break by shifting tax thresholds for a number of years now, with the latest rejection coming through a spokesman for Chancellor Merkel. It seems something of a mean-spirited stance given that the Government has eradicated its budget deficit, and the German economy, until recently, was ticking along nicely, producing record tax revenue hauls. However, not all is sweetness and light in Germany right now. The economy is expected to more or less flat-line this year as the economic conflict with Russia hits one of Germany's key export markets. What's more, Germany is also deeply in debt, to the tune of about 80 percent of GDP, and it is still effectively propping up the economies of the eurozone. One suspects that Merkel, like Cameron, would like to tackle the problem of bracket creep, but is similarly hamstrung by tight fiscal conditions and political necessity; Merkel's CDU is in coalition with the center-left SPD, which has promised to veto such a move unless wealth taxes are hiked. At least Cameron acts as if he's on the side of the taxpayer.
    Source: www.tax-news.com/news/Germany_Backs_Away_From_Income_Tax_Change____65465.html

  • Feb 13, 2014   Germany: back to the future

    Germany is in the grips of its economically destructive Grand Coalition agreement, which we have previously had cause to criticize, and which will prevent any business-friendly tax measures from being implemented for as long as it lasts, so we should at least give a subdued cheer for Finance Minister Schäuble's determination to press ahead with an increase in the pension age, although the increase, from the current 65 (as almost everywhere) to 67 by (wait for it) 2029, is underwhelming. Life expectancy in Germany has risen by 10 years in the last 50 years to 80 years at present: that may not sound very much, but consider that post-retirement lifespan has therefore gone up from 5 years to 15, on average, while the retirement age has not changed. No wonder that the pension system is in a mess. By 2029, expectancy will have increased by a further three years (and post-retirement longevity to 18 years, an increase of 20 percent in the interim). Not surprisingly, therefore, and this is the bad news, Schäuble says that the pension contribution will have to rise to 22 percent by 2030. But even that (an increase in taxation, however it is labelled) will be wholly inadequate to fund the increased pension needs. Governments are in denial across the world on this trend, of course; it's not just Germany. The Christian Democrats know very well that they ought to increase the retirement age much more rapidly, but hobbled as they are by their partners, they can't. Germany's businesses however know that the Coalition agreement simply amounts to a recipe for increased taxes. Why did Mrs Merkel do it? Just to stay in power? Because she hadn't got the spine to run a minority government? There is no happy answer.
    Source: www.tax-news.com/news/Germanys_Schuble_Defends_Pension_Reform____63631.html

  • Jan 16, 2014   Germany: off its trolley

    Austria is right to protest Germany's car tax plans, but it is scarcely a paragon of virtue itself on the tax front, and indeed is another instance of the rule that Coalitions tend to add rather than subtract from the tax raft. It seems that there will be two budgets for 2014, perhaps on the principle that tax increases in the first one will have been forgotten about by the time the second one rolls along. The tax take runs at about 42 percent of GDP, with a top income tax rate of 50 percent, with social contributions on top of that, of course. There are worse countries in the EU, but these numbers are much too high. Public debt topped 74 percent in 2012 and is thought to have exceeded 75 percent in 2013. Other macroeconomic indicators are not terrible: unemployment low at 4 percent, deficit only just above the magic 3 percent. Austria has the normal "social partners" problem of excessive entitlements; I was quite shocked at how high pensions are when I swapped notes with an Austrian friend over Christmas. Coming from the UK, I was very much the church mouse by comparison. The budgets are full of assurances that Government spending will be cut back; but the reality, as ever, is that it was higher in 2013 than in 2012. Like every other government in Europe, the Austrian Coalition hopes to be saved by growth. It's not happening.
    Source: www.tax-news.com/news/Germany_Cautioned_Over_Motorway_Toll_Plans____63290.html

  • Dec 05, 2013   Germany: forced marriage

    One up, one down for newly formed government coalitions this week: that in Luxembourg is sensibly standing firm in opposition to the EU's madcap financial transactions tax, while continuing to trot out the usual platitudes about cleaning up its financial center; on the other hand Mrs Merkel's shoddy Grand Coalition bargain with Germany's left-wing opposition has reaffirmed the financial transactions tax while agreeing to a national minimum wage and various other negative-sounding proposals. In this case the platitudes are to do with not increasing taxes, and are accompanied by a new tax on truck-drivers and foreign motorists, despite the fact that the Government is swimming in cash. That last bit doesn't matter too much, but what bothers me is the financial transactions tax. In a speech in Brussels last week, Algirdas Šemeta, the grandly-titled EU Commissioner responsible for Taxation and Customs Union, Statistics, Audit and Anti-fraud, reiterated his support for the tax, but admitted that not much progress was being made – hurrah! He also admitted that "changes will be needed to the proposal in order to reach a compromise." Yes, and the best change would be to abort the whole sorry process.
    Source: www.tax-news.com/news/Germanys_New_Grand_Coalition_Rules_Out_Tax_Rises____62841.html

  • Oct 31, 2013   Germany: chugs along

    Russia and the Ukraine count as "northern" countries, and they're certainly cold most of the time, but they don't seem to conform to the stereotype of virtuous, hard-working, dutifully tax-paying northern countries, which are typified by Germany, where there seems to be general celebration that more tax is being collected. Other paid-up members of the fiscal masochists club are the UK, Denmark, Sweden, Norway and Canada, and of course they are all largely Protestant countries. It's not an original thought that Protestantism (good work ethic etc) lay behind the industrial success of these countries, as contrasted with the laid-back, sun-drenched life-style of Roman Catholic "southern fringe" countries, but it is an element of the truth, even if Portugal had an empire and Italy has more manufacturing than the UK. We also should remember that when the course of the Industrial Revolution was marking out some countries as winners and others as laggards, there was no income tax for individuals or businesses: success came first and taxes came later. And Italy didn't even exist as a nation-state (some would say it still doesn't, but that's another story). So, returning to Germany, why do people put up with outrageously high tax rates while continuing to work hard? The tax burden in Germany is in the low forties as a percentage of GDP, but when you take out of the equation all those sections of society that are net recipients of the State's largesse, the effective rate of taxation for people in reasonably well-paying jobs is far above 50 percent. The answer is that they, or at any rate many of them, cheat, by devoting large chunks of their energy to avoiding tax in one way or another, and shipping untaxed income to places where taxes are low. The prevailing social and fiscal paradigm, therefore, is doubly inefficient: much of successful people's time and energy is devoted to escaping taxation on the one hand, while on the other the State creates moral hazard by rewarding society's disadvantaged and unsuccessful. From that perspective, the debt trap into which Europe has fallen is a consequence of the flawed paradigm, which is eventually unsustainable in the face of competition from more thrusting societies, even if in the short term it appears stable, as it currently does in Germany. I leave it to you to name those other countries, but, hint, they don't include Russia.
    Source: www.lowtax.net/asp/story/front/Germanys_Rising_Revenues_Confirm_Correct_Tax_Course____62421.html

  • Jul 25, 2013   Germany: puffing away

    As we predicted in this column a while ago, Germany's attempt to tax the life out of tobacco users under the pretext of improving their health has run into the buffers. In Continental Europe, Germany, France, Belgium, the Netherlands and the Scandinavian countries form a contiguous bloc of relatively high-taxing countries (as regards tobacco). The UK and Ireland tax more highly, and that's because they are islands, so that border customs controls are easier to operate. But in other directions, the existence of the border-free Schengen Zone means that the central bloc doesn't dare to increase rates too much because of the ease with which tobacco can be smuggled into, say, Germany from, say Greece. The Germans appear to have overstepped the mark, and an increasing volume of tobacco is escaping German taxation altogether.
    Source: www.lowtax.net/asp/story/front/Germanys_Tobacco_Tax_Drives_Down_Cigarette_Sales____61461.html

  • May 16, 2013   Germany: might cut a tax

    It's very difficult to find any good behaviour on the part of governments this week, so if I compliment German Finance Minister Wolfgang Schäuble, it isn't because he actually cut a tax – but at least he talked about cutting a tax. German capital gains tax was imposed in 2009, and in practice it amounted to an increase on the previous system which imposed income tax on 50 percent of capital gains. So now Schäuble talks about abolishing the tax; but perhaps all he means is to revert to the previous system, which would at least be a sort of improvement, at least for lower rate taxpayers. But we have to remember that elections are coming, so we are into a period in which no politician can be taken at face value. "Read my lips!"
    Source: www.lowtax.net/asp/story/front/Schuble_Eyes_End_To_Capital_Gains_Flat_Tax____60667.html

  • May 02, 2013   Germany: v Tobin

    Not sure if the Bundesbank counts as Germany, but we'll give it a prize because its President, Jens Weidmann, attacked the Financial Transactions Tax this week, which is music to my ears, you can imagine, and which is all the more remarkable given that Germany has been one of the prime movers as regards the FTT. On their own, Weidmann's criticisms won't kill the miserable animal, but coupled with legislative action in the US Congress, the UK's application to the European Court of Justice based on irregularities in the "variable geometry" 11-country structure, and perhaps best of all, the near-total failure of the French and Italian prototype FTTs (the Italian tax garnered a measly EUR29m in its first six months as against an expectation of EUR150m), it is looking distinctly wobbly. Then there was the leaked "non-paper" (EU-speak for informal document) sent this week by the 11 geometricians to the Commission, asking all the questions they should have asked two years ago when the stupid tax started to grow legs. An animal with eleven legs is probably not viable, so either they need to recruit another member, or one of the eleven can commit hari-kiri for the good (the bad) of the remainder. "It is a far, far better thing . . ." etc etc. Perhaps Italy's new government will oblige: a Letta for Šemeta. I promise that's the one and only time I'll use that pun, unless the Signore is elected into his job (almost unheard of in Italy), when he would count as a new person.
    Source: www.lowtax.net/asp/story/front/Bundesbank_President_Urges_Caution_On_EU_FTT____60566.html

  • Apr 25, 2013   Germany: on the fence

    Another stolen tax disc! This time it's a different German "Land" or state, but the same Switzerland. Well, not quite the same, because on the previous occasions the Swiss merely had to point to the deal they were cooking up with Germany; now that the deal is definitively dead after having been voted down in the Upper House and having failed to survive a reconciliation process between the two houses, the Swiss are saying that they won't apply standard exchange of information procedures in respect of stolen goods. I don't know what the OECD will have to say about that. None of the tax treaties or TIEAs I have read contain wording to deal with such a situation, and "competent authorities," the usual middlemen in cross-border tax affairs, won't much enjoy being characterized as fences. What will happen in Germany is hard to call: previously there was a rush of confessions when people thought that their golden nest-eggs in Switzerland or Liechtenstein were about to be raided by the tax authority. Now, I suppose, if someone believes that the Swiss mean what they say, there is a case for keeping stumm and simply denying everything when they come for you. That's if the money is still there. After all these years of discs, agreements, treaties and what have you, I ask myself if I would have left money in a Swiss bank account? Not that I have any. Singapore denies having received any of this flight money, with a prim expression on its face to which my old nanny would have responded: "looks as if butter wouldn't melt in its mouth."
    Source: www.lowtax.net/asp/story/front/German_State_Defends_Tax_Disc_Purchase____60503.html

  • Apr 18, 2013   Germany: mistreat China

    One country which is conspicuous by its absence from the TPP talks is of course China. Although there are ongoing negotiations between the Middle Kingdom and various other countries, and China has FTAs with a scattering of other countries, notably including ASEAN and New Zealand, on the whole it is lagging. And it considers itself as an injured party in trade affairs, complaining this week about the level of "dumping" and "counter-vailing" measures it is subject to, particular emanating from the USA. A lot of the problem revolves around the designation of China as a "non-market economy" (NME). For anyone who, like me, finds it extraordinary that China should still be regarded as an NME, a word of explanation is in order: an NME is a country in which the State subsidizes enterprises or indulges in other non-market behaviour, despite WTO rules against it. So, an NME is allowed to cheat, if you will; but the other side of the coin is that for an aggrieved counter-party, the burden of proof is lower in anti-dumping proceedings. China's accession agreement to the WTO allows it to retain NME status only until 2015; but the change is not in China's gift, and both the USA and the EU persist in regarding China as an NME, despite frequent requests from China for them to treat it as a market economy.
    Source: www.lowtax.net/asp/story/front/China_Sees_Itself_Subject_To_Increasing_Trade_Friction____60398.html

  • Feb 14, 2013   Germany: reduces taxes - maybe

    It's tough keeping up with the tergiversations of the German legislature. One party says it will reduce taxes, its partner disagrees, the lower house votes it through, the upper house throws it out, a reconciliation commission comes up with a compromise that's so complicated no-one can understand it, and then one of the Lander (States) challenges its constitutionality. So I am not quite sure how much to rely on this week's news that the Bundesrat (upper house) has allowed through at least part of the government's tax reductions. Anyway, it sounds good; and the government seems to be wallowing in money, so it can well afford some cuts. Or perhaps they ought to save it up to give to poor little Cyprus? Just EUR17bn; come on Angela, you won't notice a tiny amount like that, surely?
    Source: http://www.lowtax.net/asp/story/front/Bundesrat_Gives_GoAhead_To_German_Tax_Cuts____59584.html

  • Jan 31, 2013   Germany: in fraternity with France

    If David Cameron and his euro-sceptic legions want a semi-detached UK, the terrible twins Angela Merkel and Francois Hollande want to complete the roofing of their half-finished euro-house. Again, we'll have to shut our ears to the twaddle about transaction taxes and corporate tax unification and focus just on the fiscal charter, which will submit EU members to some sort of budgetary harmonization under the control of Brussels and Dragon Draghi. You may be surprised to hear this coming from me: how can I support Cameron's dash for freedom at the same time as euro-unification? Because Europe has to go one way or the other: a Brexit accompanied by a Grexit and a few other exits would lead to an outcome of a sort - a Europe of competing nation states, but it is against the grain of history. A better outcome would be a united Europe with one currency and a single economic budgetary policy, on the model (OK, not quite) of the USA, which could then live or more likely die in competition with other major blocs. But that's not going to be the result: instead, we will have something like a re-creation of EFTA led by the UK, with a unitary euro-zone, which may have been forced to become more competitive by the UK's antics. That's how I can have my cake and eat it!
    Source: http://www.lowtax.net/asp/story/front/Hollande_Merkel_Resume_Push_For_Fiscal_Integration____59367.html

  • Nov 08, 2012   Germany: dumps a tax

    Through the dense fog of partisanship and a divided legislature, it's sometimes difficult to be sure what's going on in (wait for it, you thought I was going to talk about the US, right?) Germany (ha, ha, gotcha!) but it does seem that the government is both running a reasonably tight ship, debt-wise, even after paying its contribution to one or more of those European funds for saving southern member states from the consequences of their fiscal follies, and actually managing at the same time to abolish an unpopular tax without, apparently, introducing a new one. Was that sentence Churchillian? If not, I'll try to do better next time. How does Germany manage it? Taxes are high, higher than they ought to be, but there is a general presumption in favour of business, which operates at all sorts of levels. The problem for Germany is that it is part of the EU, so that it is encumbered with all of the social partners nonsense and vast amounts of monetary support for the old, the weak, the sick, and the feckless. So far this doesn't seem to have prevented it from competing against the rising powers of the East, but for how long can it continue?
    Source: http://www.lowtax.net/asp/story/front/Germany_Unites_On_Plans_To_End_Health_Contribution____58122.html

  • Oct 25, 2012   Germany: eyes wide open

    Francois Hollande talks about a 'banking union' in the eurozone in 2013, while Angela Merkel rows back, demanding 'quality' before 'speed'. Whatever was agreed, or will be agreed, as far as I can see it is all a plot to spend your and my money on propping up banks which ought to be allowed to go bankrupt. Here is how it goes: 1. banks lend money to governments by buying their bonds; 2. the governments get into debt up to their eyeballs and the banks won't lend them any more money; 3. the banks start to dissolve because their holdings of government bonds are worthless; 4. governments buy the banks for a fraction of what the banks had lent them. But that game has come to a juddering halt at step 4., because of Greece, which hasn't got the money to do it, and can't borrow the money from the ECB or the IMF. So now they have a nice new game, which is to pretend that the banks are stateless (like refugees), and they will recapitalise them direct from the European Stability Mechanism (ESM) which has somewhere between EUR500bn and EUR1 trillion to spend, and it won't count as government debt. But it will count as eurozone debt, so what's the difference? Well, the crucial difference is that Italian taxpayers have to pay off Italian debt, whereas eurozone debt has to be paid off by eurozone taxpayers in proportion to their contributions to the ESM. Germans therefore pay most, and that's why Angela Merkel doesn't like the deal. And has anyone asked the taxpayers? Of course not, and not one in a thousand of them has any clue as to the trick that is going to be played on them. Maybe it's all a necessary part of forming the United States of Europe; but it would be nice to be asked! So, black marks all round, but especially for France and Germany, which are leading the charge, willy-nilly.
    Source: http://www.lowtax.net/asp/story/front/EU_Agrees_To_Full_Banking_Union_In_2013____57891.html

  • Oct 18, 2012   Germany: Germany on the fence

    The stolen tax-disc saga is grinding on in Germany, with another opposition-controlled state (Rhineland-Palatinate) threatening to buy a disc of Swiss bank account details. The practice has been legitimized by the Constitutional Court providing the stolen data is used in criminal investigations. But what does that do other than criminalize a large number of Germans who were playing hide-and-seek with the tax authority? You may say that cheating on your taxes is criminal and deserves to be punished, but hold hard! Imagine that your grand-dad, on the run from the Nazis in 1935, took a trunk-load of gold francs to Switzerland and put them in a bank vault. There they sit, converted by your father into ten million euros' worth of zero-coupon corporate bonds in 2005 after the Savings Tax Directive came in. He died last year, and now they're yours. You live in a Rhenish village near your solar-panel factory (no chance of getting back the castle in Silesia stolen by the Russians in 1945) and you're in deep discussion with your lawyers and accountants as to how to handle the inheritance tax issues, whether to wait for the Swiss/German deal or not, and now suddenly you're going to be a criminal! The execration I'm giving to Germany is not for pursuing undeclared wealth, it's for being disorganized enough not to have resolved this affair long ago, and as a result of its procrastination, dragging worthy citizens through the mire. Of course our rich friend will go to the taxman, open a negotiation, and there will be a settlement; but he should not have been put in this situation in the first place.
    Source: http://www.lowtax.net/asp/story/front/German_State_Poised_To_Purchase_First_Swiss_Tax_Disc____57814.html

  • Aug 23, 2012   Germany: tries to honour a commitment

    This is an encomium for Angela Merkel, who is trying very hard to stick to the deal Germany did with Switzerland over bank deposits in the teeth of opposition from her socialist opponents. In the USA their attitude would be called class-envy, but of course we don't have classes in Europe any more, do we? Anyway, the duty of an opposition is to oppose, but what gets up my nose is that they think it is OK for the State to steal. Specifically the state of North Rhine Westphalia, which is specifically and blatantly stealing computer data from the Swiss. OK, we all know it's normal for the State to kill people, whether or not they admit to it, and to lie (they all do it all the time and they don't make the smallest pretence about it). The only one of the 10 Commandments they don't break is the one about neighbours' wives, and if for State you substitute Head of State, I'm not even sure about that one. It beggars belief that a state (I don't like the capital letter) might expect its citizens to obey laws which are comprehensively broken by their rulers. In history, this has led to the collapse of empires, and beyond question it is one of the main factors behind the moral bankruptcy of modern society. Want to know who to blame? Go and talk to North Rhine Westphalia. For instance.
    Source: http://www.lowtax.net/asp/story/front/Merkel_Stands_Firm_On_Swiss_Tax_Deal____56813.html

  • Jul 26, 2012   Germany: on the side of the angels

    In lumping Continental countries into a bag called 'statist' it's often forgotten that historically, say over the last 40 years, Germany and Denmark at least have far more often been on the side of pro-market initiatives than in the protectionist camp. Not so the European Parliament which is a Bad Thing writ large: anti-market, crazy left fringe, consumerist, green etc. So Mrs Merkel's support this week for a free trade agreement between the EU and Thailand is a welcome reversion to type. It's not enough to make me forgive her for supporting the financial transactions tax, but then everyone knows that's not going to happen; you might as well blame The Pope for being against contraception.
    Source: http://www.lowtax.net/asp/story/front/Merkel_Seeks_Rapid_Conclusion_Of_EUThailand_FTA____56448.html

  • Jun 21, 2012   Germany: on the primrose path to ruin. Won't it be nice when all those horrid bankers have gone? (to Hong Kong)

    They don't believe in competition in large swathes of the EU, including obviously France; but more surprisingly, nor do they in Germany. At least, the politicians don't. Evidently the Mittelstand does, and international companies like VW or Siemens can hardly do other than live or die by it. But try telling that to the idiots who govern the country. Of course, they're just doing what will get them re-elected next time, we know that. But then that makes them liars as well as stupid. We knew that, too. So what to do about the lemmings who are about to jump over the FTT cliff? Are they just striking poses? Will they slam on the brakes at the last moment? Don't count on it. Nicolas Sarkozy encouraged banker-hatred for his usual pragmatic, populist purposes, and had no choice but to follow through the destructive logic, not that it helped him. Ironically, it has helped Francois Hollande, who can now double the tax (he said he would, this week) without being blamed for it. Oh, you didn't know what FTT stood for? Lucky you. Financial Transactions Tax, or 'How to destroy your banks in one easy lesson'. You don't even need a Bac or an O-level; just a big mouth and an empty treasury. So that's black marks for both France and Germany. An FTT is a BAD THING. In capitals.
    Source: http://www.lowtax.net/asp/story/front/Germany_To_Take_First_Steps_Towards_EU_FTT____55905.html

  • May 31, 2012   Germany: against freedom of movement

    As usual, it's a lot easier to find candidates for execrations than encomiums (governments seldom act in the interests of their citizens), but from the embarras du richesse on offer this week I'll take my first pot-shot at Germany, which is refusing to reduce the level of its air travel tax, using as evidence an analysis produced by the finance ministry, and this just days after the Transport Minister said he was open to a discussion on the subiect. The finance ministry always wins, of course, in Germany as elsewhere. It disputes that people in border regions are choosing to fly out of neighbouring, cheaper airports, on the grounds that overall traffic has gone up,which is laughable. These taxes, which are very prevalent in the EU, are a direct attack on the freedom of movement of individuals, which is one of the EU's most basic principles, and one of the few areas in which it can really be said to have made a difference. Why doesn't the supine ECJ ban them?
    Source: http://www.lowtax.net/asp/story/front/German_FM_Stands_Firm_On_Plane_Ticket_Tax____55648.html

  • May 17, 2012   Germany: Germany's upper house of parliament refusing to cut taxes

    Things don't move quickly in Germany; very often progress is deliberate and even predictable, and sadly the Bundesrat's veto of Angela Merkel's attempt to reduce income tax was just that: predictable. But that doesn't make it any the more forgivable. In fact, the vote is probably unconstitutional – the government has no choice but to try to reverse the effects of what most people call 'bracket creep', the automatic increases in tax that follow on after inflationary wage increases if tax brackets remain the same. It seems hard to punish the country's ranking in such circumstances; but it's results that matter, and higher taxes are a Bad Thing, however they come about. The deputies should be ashamed of themselves.
    Source: http://www.lowtax.net/asp/story/front/Bundesrat_Blocks_German_Tax_Cut_Plans____55434.html

  • May 10, 2012   Germany: determined to cut taxes while sticking to its European austerity agenda

    Source: http://www.lowtax.net/asp/story/front/Merkel_Set_For_Battle_On_Tax_Cut_Plans____55310.html


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