Andrea Gebauer German Federal Ministry of Finance

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

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3. Total German Tax Revenue 449 bn € Overview Taxes • Taxes accruing to the Länder • Inheritance and gift tax • Real property transfer tax • Motor vehicle tax • Tax on betting and lotteries • Fire protection tax Länder Federation Total 20.5 bn € • 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 • 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 %) Total 37 bn € Total 83.5 bn € Total 308 bn € Municipalities EUROsociAL – Workshop Brasilia

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

5. Overview Taxes • Taxes accruing to the Länder • Inheritance and gift tax • Real property transfer tax • Motor vehicle tax • Tax on betting and lotteries • Fire protection tax Länder Federation Total 20.5 bn € • 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 • 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 %) Total 37 bn € Total 83.5 bn € Total 308 bn € Municipalities EUROsociAL – Workshop Brasilia

6. Division of Income Tax Revenue (2005) Number of taxpayers 24.3 m Total Revenue 182.4 bn € 27.6 bn € 77.4 bn € 77.4 bn € EUROsociAL – Workshop Brasilia

7. Overview Taxes • Taxes accruing to the Länder • Inheritance and gift tax • Real property transfer tax • Motor vehicle tax • Tax on betting and lotteries • Fire protection tax Länder Federation Total 20.5 bn € • 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 • 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 %) Total 37 bn € Total 83.5 bn € Total 308 bn € Municipalities 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. 1The 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 MunicipalitiesDue to Financial Equalization Scheme Between The Federal Government and The Länder EUROsociAL – Workshop Brasilia

15. Total Tax Revenue of The Federation (2005) FederationTax Revenue 230.1 bn € - 39.9 bn €1 190.2 bn € 83.5 bn € 146.6 bn € 1Transfers to Länder, Municipalities andEU EUROsociAL – Workshop Brasilia

16. Total Tax Revenue of Municipalities (2005) Total Revenue 59.8 bn € - 2.3 bn € 20.2 bn € 41.9 bn € EUROsociAL – Workshop Brasilia

17. Total Tax Revenue of Länder (2005) Total Revenue 180.7 bn € 20.8 bn € 26.2 bn € 133.7 bn € EUROsociAL – Workshop Brasilia

18. 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 EUROsociAL – Workshop Brasilia