Income and corporate tax reform 2001-2005

Between 2001 and 2005, the federal government carried out a comprehensive tax reform that affected all taxpayers. The reform was implemented in three stages (2001, 2004 and 2005). However, the changes largely only related to income taxes, in particular to income tax and corporation tax. The trade tax (trade tax reform) remains in place.
Inventory taxes as well as transport and consumption taxes were hardly affected by the reform; however, the greening of tax law was continued (ecological tax reform). The amendments do not initially simplify tax law. Measures to counter-finance the tariff reductions (broadening of the tax base) have been introduced in large numbers. Positive economic effects are expected. The tax reform consisted of the following priorities:

1. Der Income tax rate wurde stufenweise gesenkt. The initial rate fell from 19.9 % (2001) via an intermediate level (2004) to 15 % (2005). The basic tax credit has been increased in stages. The top tax rate was reduced from 51 % via intermediate levels from 48.5 % (2001), 47 % (2003) to 42 % (2005). The solidarity surcharge remains for the construction east.

2. The corporate income tax rate for distributed and withheld profits has been reduced uniformly to 25 %. Das körperschaftsteuerliche Crediting procedure wurde durch ein Halbeinkünfteverfahren ersetzt. Die gesamte Ertragsteuerbelastung (KSt, GewSt, So1Z) für Kapitalgesellschaften liegt unter 40 % (Wettbewerb der Steuersysteme).

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