Income sovereignty defines the right of a state corporation to collect all or part of the income from a type of tax. The Basic Law lays down in Art. 106 which income from tax revenue is due to the federal, state and local governments.
The federal government is entitled to income from federal taxes (customs duties), insurance tax, solidarity surcharge, levies within the framework of the European Union, consumption taxes regulated by federal law and a share of community taxes (income tax, corporation tax and a share of sales tax and trade tax allocation). The tariffs continue to flow to the EU. The federal states are entitled to the income from state taxes (inheritance tax; land transfer tax; vehicle tax; fire protection tax; Beer tax; Casino tax; Racing betting and lottery tax) as well as shares in community taxes.
The municipalities are entitled to trade tax (with the exception of the trade tax apportionment), property tax, local consumption and Expense taxes as well as shares in sales, wage and income tax. The shares of the individual taxes and the percentage of the share are regulated by law. The federal government, federal states and municipalities all share in the income from the main types of tax, which regularly leads to considerable disputes over distribution (financial equalization).
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