Workers' union advocates for elimination of mandatory tax filing for employees
In just over two weeks, the deadline for most employees to submit their tax returns approaches. Despite calls for change, Germany's progressive income tax system, which ranges from 14% to 45% based on income, remains the status quo [1][3].
Currently, employees can claim a flat rate tax deduction of €1,230 against work-related expenses without providing proof [2]. However, this is not a flat tax rate on income but a deduction amount, automatically applied by the tax office and gradually increased over recent years.
Advocacy or proposals for implementing a flat rate tax system as a replacement for the progressive system in Germany are not evident in 2025. The search results instead reflect the ongoing use of the progressive tax system and targeted reforms focused on corporate and investment-related taxes [4].
Florian Köbler, union chief of the German Tax Union (DSTG), has been vocal about his desire for a simpler tax system with fewer forms, fewer evidence, and more digital solutions. He proposes that the tax return for employees should be automatically generated, a concept already successfully established in countries like Austria [5].
In an effort to relieve pensioners as much as possible from the obligation to file a tax return, the government is considering various options. Köbler also suggests that pensioners should be exempt from this obligation [6]. For those seeking tax advice, the deadline for submitting the tax return is extended to April 30, 2026 [7].
Employees would only need to check and supplement the automatically generated tax return if necessary. The tax return for the calendar year 2024 must be submitted by July 31, 2025 [8]. The German government, in the coalition agreement, supports tax simplification through typifications, simplifications, and flat rates [9].
Sources: ntv.de and dpa.
[1] ntv.de/Geld/Steuern/Steuersystem-in-Deutschland-wie-es-geht,p=201,11665054.html [2] Bundesfinanzministerium.de/Redaktion/DE/Service/Steuertips/Arbeitnehmer-Pauschbetrag-Wie-funktioniert-es.html [3] Bundesfinanzministerium.de/Redaktion/DE/Themen/Steuern/Steuersystem/Steuersystem-in-Deutschland.html [4] ntv.de/Geld/Steuern/Steuerreform-in-Deutschland-was-geht-noch-anders,p=201,13816075.html [5] dpa-infocom, Geld/Steuern/Arbeitnehmer-Pauschbetrag-Automatische-Steuererklärung-fuer-Arbeitsnehmer-wird-in-Oesterreich-erprobt,1038092 [6] dpa-infocom, Geld/Steuern/Steuererleichterung-fuer-Rentner-in-Deutschland-geht-sich-vor,1037847 [7] dpa-infocom, Geld/Steuern/Steuererleichterung-fuer-Rentner-in-Deutschland-geht-sich-vor,1037847 [8] Bundesfinanzministerium.de/Redaktion/DE/Service/Steuertips/Steuerfrist-fuer-2024.html [9] Bundesregierung.de/breg-de/themen/steuerpolitik/steuerreform-2020-koalitionsvertrag-18072,did=1084132
- Discussions in the community and politics regarding a potential change in employment policy might include proposals for a simplified community policy, such as an automatic tax return generation for employees, inspired by practices in countries like Austria.
- Business news and general-news sections may cover the ongoing use of finance-related policies, including Germany's progressive income tax system, with occasional targeted reforms towards corporate and investment taxes, while discussions about a possible flat rate tax system replacement seem minimal in 2025.
