Global Daily Tax News, German Cabinet Endorses 2024 Annual Tax Act, (Jun 7, 2024)

On June 5, 2024, Germany's Cabinet approved the Annual Tax Act (JStG 2024).

As well as including measures to streamline and modernize tax administration, the legislation includes provisions responding to EU law changes and the case-law of domestic courts and the European Court of Justice.

Notably, the Bill introduces the option for employers to charge a flat rate of income tax of 25 percent on transportation allocated to employees that are used for personal use, capped at a benefit of up to EUR2,400 per year.

The tax deferral for monetary benefits from capital investments, such as in shares and GmbH shares, is being extended to intra-group transfers of shares.

The German Government said the legislation also includes the following measures:

• Implementation of the Federal Constitutional Court (BVerfG) decisions on the transition from the imputation procedure to the half-income procedure (Sections 34 and 36 KStG);

• Legal consolidation of the EUR150 simplification rule for bonus payments for health-conscious behavior (Section 10 EStG);

• Extension of the settlement period for investment funds from five to ten years;

• Changes to the Conversion Tax Act;

• Authorization for the direct transfer of tax data from the licensing authorities to investigative authorities (Section 31a AO)

• Adaptation of Section 10 paragraph 6 and Sections 13d and 28 paragraph 3 of the Inheritance Tax Act in accordance with Union law;

• Amendments to the Tax Statistics Act;

• Changes to the average rate for farmers and foresters (Section 24 Paragraph 5 Sentence 4 UStG);

• VAT exemption for educational services (Section 4 Number 21 UStG); and

• Tax exemption for travel insurance fund fees (Section 7a RSG).