The German government is set to implement significant tax reforms aimed at providing relief to taxpayers, particularly families.

Starting in 2024, the basic tax allowance will increase by €180 to €11,784, with further increases planned for the following years.

Additionally, the child tax allowance will rise by €228 to €6,612 this year.

A notable change will be the abolition of tax classes 3 and 5 for married couples, transitioning to a new system where partners will be taxed under class 4 with a factor method starting in 2030. This aims to distribute tax burdens more equitably between partners.

The government anticipates these reforms will save taxpayers an average of €14 billion annually by 2028, addressing inflation and ensuring that the minimum living standards remain untaxed.