100. Tax Reform Report

KPMG Germany Webpage
Click on the above link to visit the KPMG Germany webpage on the Mondaq website
For disclaimer and copyright see end of this article.

In article no.80, we reported that the political deadlock which was blocking passage of the Government's fundamental tax reform proposals appeared to be insurmountable, but that at least a reduction in the solidarity surcharge was likely from 1998 onwards (see articles nos. 60, 70, and 80). New developments since then are summarised in this article, which is current through 16 December 1997.

1. Reduction of the solidarity surcharge

A two percentage point reduction in the solidarity surcharge effective from 1998 onwards was promulgated on 28 November 1997 and has entered into force. The solidarity surcharge will thus be reduced from the current 7.5 % of personal and corporate income tax assessed to 5.5 % starting next year. Since the proceeds of the solidarity surcharge go exclusively to the federal government, the