FISCAL FEDERALISM IN GERMANY -
STRUCTURES AND REFORM
FISCAL FEDERALISM IN GERMANY -
STRUCTURES AND REFORM
Author(s): Rainer ArnoldSubject(s): Law, Constitution, Jurisprudence, Law on Economics
Published by: C.H. Beck Publishing House - Romania
Keywords: financial perequation; vertical and horizontal distribution of tax revenues; principle of solidarity; fiscal power; loyal cooperation in the federal state;
Summary/Abstract: Fiscal Federalism is one of the core issues in German constitutional law. Asthe 16 Member States of the Federation are considered to be States, they must disposeof a sufficient amount of money for fullfilling their own tasks. The current system offinancing, which is in reform and will be in part different from 2020 on, is based on theprinciples of solidarity, loyal cooperation and efficiency in the Federation. The mainfinance resources resulting from the income tax, the corporation tax and the VAT aredivided between Federation and Member States by 50 % (as to the two first namedtaxes) and distributed in a rather flexible system as to VAT. This vertical distribution iscomplemented by the horizontal distribution between the 16 Member States. This isbased on the principles of domicile (as to the income and corporation taxes) and, forVAT, on the number of Member States’ inhabitants. The finacial perequationcompensates to a great extent fiscal power divergences. This last step is in refom being
Journal: Istorie, Cultura, Cetatenie in Uniunea Europeana
- Issue Year: 11/2018
- Issue No: 1
- Page Range: 31-40
- Page Count: 10
- Language: English