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Tax Cuts, No Tax Hikes For Germany's New Coalition Gov't

by Ulrika Lomas, Tax-News.com, Brussels

16 January 2018


The three political parties set to form Germany's next governing coalition have agreed to reduce the solidarity tax burden, according to the text of the recently released agreement.

Used to help fund economic development in the east of Germany, the solidarity tax is a 5.5 percent surtax on both corporate and individual income. The agreement between the Christian Democrat Union, the Social Democrat Party, and the Free Democrat Party states that the incoming Government would reduce the tax for those on low and middle incomes, as a first step towards gradually abolishing it.

The coalition agreement pledges not to increase tax on German taxpayers, but has a strong emphasis on tackling tax avoidance and on cooperating with other jurisdictions to ensure the appropriate alignment of tax and corporate profits, especially with regards to the digital economy.

"We support just taxation of large corporations, especially the internet companies Google, Apple, Facebook and Amazon," the document states.

The agreement also declares the new coalition's support for the proposed European Union common corporate tax base, and for a "substantial" financial transactions tax at EU level.

TAGS: tax | value added tax (VAT) | tax avoidance | corporation tax | internet | transfer pricing | Germany | Europe

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