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Germany Today

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Friday, September 20, 2024

Germany to Reform Tax Classes for Couples

Published: 2024-08-12

Germany's Finance Minister, Christian Lindner, has assured married couples that the planned abolition of tax classes 3 and 5 will not result in financial disadvantages.

From 2030, couples will automatically be placed in tax class 4 with a factor procedure, which aims to distribute the tax burden more equitably between spouses.

This change is part of a government decision made in July to eliminate the popular tax classes 3 and 5, which are currently chosen by 39% of jointly assessed taxpayers.

Lindner emphasized that the Ehegattensplitting, a tax benefit for married couples, will remain intact to avoid a significant tax increase.

He also noted that there is no immediate action required from couples, although they can start discussing fair tax distribution now.

The new system is designed to prevent the often burdensome year-end tax payments to the tax office.