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German Union Rules Out Regional Inheritance Taxes

by Ulrika Lomas, Tax-News.com, Brussels

06 December 2013


The German tax officials' union DSTG has vehemently rejected the idea of replacing a uniform national inheritance tax with regional variations, as a means of encouraging "competitive federalism" in Germany.

During a recent symposium on the future of inheritance and gift tax in Germany, discussing a feasible and constitutional reform of the tax, organized by the German tax advisor's institute DWS, the DSTG union opposed the idea of giving the federal states in Germany the autonomy to determine their own inheritance tax laws and regulations.

Chairman of the DSTG, Thomas Eigenthaler, made clear that such a measure would merely add yet another layer of complexity to the German tax law. Regionalizing inheritance tax would be "a false signal to Europe," given current efforts at European level to clamp down on undesirable, harmful tax competition between states, Eigenthaler insisted. It would therefore be extremely damaging to consider rekindling "aggressive tax competition" between the federal states, he argued.

Furthermore, Eigenthaler maintained that the proposal would not fit in with plans to introduce a national tax software system in Germany. "Konsens" is a project designed to unify the German Tax Administration's software.

Concluding, Eigenthaler advocated that a national inheritance tax should have a wider tax base and low tax rates, and emphasized that there must be comprehensive clarity regarding the regulations, so as to avoid any unnecessary, lengthy, and costly litigations.

TAGS: inheritance tax | tax | law | tax rates | gift tax | Germany | tax reform | regulation | Europe | Tax

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