Tax reform: Union calls for an end to tax returns for employees!

Tax reform: Union calls for an end to tax returns for employees!

What is happening in German tax law? The German Tax Union (DSTG) recently made a demand that promises relief for many employees: the abolition of tax returns. Union leader Florian Köbler puts it in a nutshell: tax law should become simpler, with fewer forms and evidence. Instead, suggestions for more digital solutions and automated processes are being thrown out. In the future, the tax return for employees could be created automatically and they would only have to check it and supplement it if necessary. This model has already been successfully implemented in Austria, which arouses gratitude among those responsible.

Köbler points out that pensioners should also be exempt from the annoying obligation to file tax returns. An automatic source deduction via the pension fund could be used here. This would not only be a relief for the stronger senior generation, but would also be in line with the goals of simplifying tax law set out in the coalition agreement between the CDU, CSU and SPD.

The digital change in tax law

In the course of these developments, the legislature is planning to gradually make digital filing of tax returns mandatory. Pre-filled and automated tax returns should be expanded for simple tax cases. The deadline for submitting self-filled tax returns is July 31, 2025. Anyone who relies on tax advice has until April 30, 2026 to submit their documents. This will specifically reform the existing system and minimize bureaucracy through digitalization. These steps are necessary to create a more citizen-friendly tax system.

This is not the first initiative of this kind. Christian Lindner, the then Federal Minister of Finance, had already emphasized some time ago that it was important to establish a tax system that was more citizen- and business-friendly. For this purpose, experts and practitioners were asked for suggestions, which could also be of an experimental nature. It is important that tax simplifications do not lead to financial burdens, but rather help to relieve the burden on citizens.

Expert commissions for the future

The “Simplified Corporate Tax” and “Citizen-oriented Income Tax” working groups have presented their results in recent months. These are intended to promote a simple and citizen-oriented tax system and strengthen trust in tax law. The two commissions are intensively addressing the challenges posed by the existing system. Digitalization in particular is seen as the key to reducing bureaucracy and making tax return processes clearer and more understandable for everyone involved.

It remains to be seen how quickly the required reforms will be implemented. However, there is support for a sophisticated and citizen-oriented tax policy, and experts like Köbler show that people-friendly tax practices can be advanced. The days of complicated forms may soon be a thing of the past.

For more detailed information and background information on these developments, please refer to the reports World and SWR3 referred. In addition, this offers Federal Ministry of Finance relevant information about the commissions set up and their work results.