Wednesday, 17 September 2008

Income tax rate in Germany

The income tax in Germany is one of the lowest among OECD countries. The income tax contributes around 21 percentage in the GDP of Germany. The tax varies from 15 % to 45 %. Tax rate
The income tax rate, according to which the PAYE tax is calculated under consideration of the allowances and lump sums to be assessed for employees, is the core of the Income Tax Act. The structure of the income tax rate is determined to a major degree by the fact that the tax burden must be adjusted to the financial requirements of the state and - under the aspect of fiscal justice and for social reasons - the capacity of the taxpayer.
A basic personal allowance is deducted from taxable income; it is EUR 7,664 for single persons and EUR 15,329 for married couples.
The minimum tax rate is 15%. To start with, this rate increases progressively up to a rate of 42% for a taxable income of EUR 52,152 / EUR 104,304 (single persons/ married couples). If taxable income reaches EUR 250,000 / EUR 500,000 (single persons/ married couples), the tax rate is 45%. These are so-called marginal tax rates.

No comments: