Tax Reform Compact III - Counter-financing for the Tax Reform

Increase in capital gains tax

The Capital gains tax will be from 25% so far raised to 27.5%. The increased KESt also applies to contributions from private foundations, income from the sale of securities, or distributions from real estate funds. Only for Interest from savings accounts and current accounts explicit further the withholding tax amounting to 25% foreseen.

Increase in VAT

In some transactions subject to the reduced sales tax rate of 10%, a Tax rate increase to 13%. The increase applies primarily to accommodation services, the delivery of art objects, revenues from artists, film screenings, domestic air travel, museums, theaters, and the delivery of live animals, plants, and firewood. System-related The sale of Ab-Hof wine increased to 13% (from 12%). In principle, the tax rate increases will take effect on January 1, 2016. For Accommodation services, However, for theater, music and singing performances, the increases will only apply from the 1.5.2016. Transitional provisions exist in some cases for transactions that take place between May 1, 2016 and December 31, 2017 to be carried out (possibly linked to deposits/prepayments).

Elimination of special budget expenditures

Contributions to voluntary Health, accident or pension insurance, contributions to certain life insurance policies and expenses for the creation or renovation of living space were previously classified as so-called „Special issues of Topf“ deductible. As part of the tax reform, there will be a Elimination of this option for depositing. For Old contracts, Those completed before 1.1.2016 will be allowed to be tax-deductible until 2020 for reasons of trust protection.

Elimination of the education tax credit and education bonus

The education tax credit (20%) or the education bonus (6%) can be claimed for the last time in the 2015 tax return and will no longer be available from 2016 onwards.

Further elimination and restriction of benefits

Instead of the previous differentiation by usage type (direct operational purpose, other operational purposes, non-operational), a standard depreciation rate of 2.5% for the Depreciation of buildings provided. For operating buildings that are leased for residential use, the AfA is set at 1.5%. In addition, there is a Extension the distribution deadline for Repair costs from 10 to 15 years in business and private assets.