Monday, November 16, 2009

New Tax Reform - What it means to me?

We have been hearing quite a lot these days that the new coalition government in Germany pressed by FDP (Free Democratic Party) shall bring new tax reforms. The issue is much debated as the new Finance Minister Schäuble has refused for any major changes as the total rehaul of the tax system shall definitely take longer time and introducing the reduction of income tax shall bring more deficit to the economy inview of the current financial crisis thou Germany has declared itself totally out of recession. Moreover many states have challenged the proposed tax deductions as it may make bigger holes in their treasures. Despite rejections from Wolfgang Schäuble, the Finance Minister of the Germany, FDP is pressing hard to bring in the new Tax System in Germany with "Three Level Tarif".

Well, we may be wondering what these Tax reforms shall bring to us as an individual and what difference it shall bring to our incomes. The "Three Level Tariff" is as follows:
  • 10% Income Tax on Gross Annual Income upto 20,000 euros
  • 25% Income Tax on Gross Annual Income upto 50,000 euros
  • 35% Income Tax on Gross Annual Income above 50,000 euros
Thus FDP is pressing towards a simpler and more transparent Tax Systems in Germany.

You can calculate here by inputing your Gross Salary Income how much you are paying now and what shall be the impact of the Level Tariff.

Please donot forget to leave a comment if this information has helped you.

Vergleich Steuermodelle


  1. that is nice... there is a similar taxation structure under consideration back here in India. Hope it gets implemented and all our tax calculation pain points are solved with this. More info on that here -

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  3. Its nice information.

    If any one know more on tax cards like 3, 4 & 5 after the changes in tax reforms please do update us thanks

  4. Hi Seema,
    Thanks for information, I am following you from blogcatalog game. Keep sharing your knowledge.


  5. 20,000 euros means around Rs 12 lakhs. A 10% tax for Rs 12 lakhs is highly acceptable as the tax rates in our courtry is much higher.

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  6. Hey thanks for sharing, I am bad at taxes :((

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