DSTG Proposes Reforms to Streamline German Tax Administration
Tax overhaul instead of disorder: DSTG head Florian Köbler envisions a change
The German Tax Union (DSTG) has unveiled a series of reforms aimed at modernizing and streamlining the country's tax administration, addressing demographic challenges and promoting a more efficient, citizen-friendly system.
Addressing Demographic Challenges
The DSTG anticipates a significant reduction in personnel in the tax administration by 2030, with a projected decrease of around one-third. To mitigate this, the DSTG has proposed a number of measures to ensure the continuity and efficiency of the tax system.
Workday Allowance and Generalized Business Expenses
One such measure is the introduction of a workday allowance, which would combine commuting allowance, home office allowance, and a fixed euro amount per workday, regardless of the location of work. This allowance aims to solve the problem of commuters and provide a more flexible working environment.
For small businesses with up to 25,000 euros in turnover, the DSTG suggests introducing generalized business expenses, similar to the model in Austria since 2020. This move is intended to simplify the tax process for small businesses and reduce administrative burdens.
Electronic Invoices and Automated Assessment
The DSTG also plans to make electronic invoices mandatory for entrepreneurs by 2028, with the ultimate goal of making the tax return obsolete. Additionally, the introduction of the Austrian model of automatic assessment for the tax year 2026 is proposed, where the tax office provides citizens with a draft tax return and makes an automated assessment.
Abolition of Tax Return for Employees and Pensioners
The DSTG is advocating for the abolition of the tax return for employees and pensioners, although this exemption does not apply to classical income from self-employment. This reform is intended to make the tax system more efficient and user-friendly for the majority of taxpayers.
Combating Tax Evasion
Recognizing the issue of tax evasion, the DSTG is focusing on combining modern technology, such as AI, with the collective experience of their colleagues to specifically target tax evasion. The DSTG has presented an ambitious 10-point plan called "Tax Revolution 2030" to reform the German tax administration, with a focus on combating tax evasion.
Conclusion
The DSTG's proposed reforms aim to create a more socially just and efficient tax system, addressing issues such as demographic challenges, administrative burdens, and tax evasion. While there is no official "DSTG Action Plan 2025" or "Tax Revolution 2030" as of July 2025, the DSTG's initiatives highlight a commitment to modernizing the German tax administration and ensuring a more streamlined, citizen-friendly system.
- The proposals from the German Tax Union (DSTG) in combating tax evasion, such as the use of AI and collective expertise, indicate a focus on business (finance) and politics, as these reforms aim to foster a more efficient, fair, and honest business environment.
- In an effort to streamline the German tax administration, the DSTG has suggested abolishing tax returns for employees and pensioners, a move that could impact general-news as it simplifies the tax process for a large portion of the population.
