The German tax system

Structure• 1. Personal Rent Tax

1.1. Taxable event and definition1.2. Tax exemption1.3. Tax burden1.4. Tax classes

• 2. Added Value Tax2.1. Taxable event and defintion2.2. Tax exemption2.3. Tax burden2.4. Concept

1. Personal Rent Tax• 1.1. Taxable event and definition:

- Determination base of the Personal Rent Tax isthe taxable income- This is the sum of all earnings after subtractingall exemptions• 1.2. Tax exemptions:

- income < 8652,- €- many perks and exemptions

1. Personal Rent Tax• 1.3. Tax burden:

- different tax classes have different rates- higher income tax rate increasesTotal income- perks and tax exemptions= taxable amount× rate of your tax class= Personal Rent Tax

1.4. Tax classesTotal income Personal Rent TaxUntil 8,652 €: PRT = 0.00 %0.00 €From 8,653 € to 13,669 €: PRT = 0.00 % - 6.96%0.00 € - 952.00 €From 13,670 € to 53,665 €: PRT = 7.00 % - 27.81 %959.00 € - 14,922.97 €From 53,666 € to 254,446 €: PRT = 27.81 % - 40.83 % 14,922.97 € - 103,889.01 €Higher than 254,446 €: Maximum PRT is 45.00 %

2. Added Value Tax• 2.1. Taxable event and definition:

- also called „turnover tax“ - taxable events are all deliveries and services- only the consumer actually pays the tax whenacquiring goods because- companies get the Added Value Tax refunded as„pre-tax“ for goods they sell on or manufacture

2. Added Value Tax• 2.2. Tax exemptions:

- heritages, sickness benefits, loan revenues, medical services, exports to EU-companies• 2.3. Tax burden:

- calculated from all turnovers, services, deliveries- common rate: 19 %- reduced rate: 7 % (groceries, non-alcoholicbeverages, books, newspapers)

2. Added Value Tax• 2.4. Concept

ConsumerEntrepreneur Entrepreneur

Finance authority

Raw material End product

Added Value TaxAdded Value Tax

Sourceshttp://www.bpb.de/izpb/147080/unser-steuersystem?p=allhttp://www.bpb.de/nachschlagen/lexika/lexikon-der-wirtschaft/19161/einkommensteuerhttps://www.bmf-steuerrechner.de/ekst/ekst.jsphttp://www.bpb.de/nachschlagen/lexika/lexikon-der-wirtschaft/20891/umsatzsteuerhttp://i.huffpost.com/gen/1414652/images/o-STEUERN-facebook.jpghttp://cdn.agrarverlag.at/bz/mmedia/image//2012.12.11/13552237769523_1.png?1355223779