German Tax Amnesty Expected To Bring In More Than 5 Billion Euros

by Ulrika Lomas, Tax-News.com, Brussels

18 February 2003

A partial tax amnesty due to be approved by the German cabinet on Wednesday is likely to net the government some 5 billion euros in additional tax revenue this year, Reuters reported on Monday.

According to a draft copy of the legislation seen by the news service, the German authorities expect around 20 billion euros to be repatriated this year, following the announcement in December of plans to impose a 25% withholding tax on returning funds in 2003, with the rate increasing to 35% between January and June 2004.

Although the government is currently in need of every euro that it can lay its hands on, as its budget deficit teeters on the brink of the EU's Stability and Growth Pact 3% ceiling, the likely approval of the amnesty plan could be viewed as something of a U-turn for the government, especially Finance Minister, Hans Eichel, who announced last year that:

'I won't stand for the idea that people who have not paid their taxes should get special treatment and not pay as much as honest taxpayers.'

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