There is controversy over whether or not the December 2022 gas relief should be taxable.
(Photo: dpa)
Frankfurt The federal government launched emergency aid because of the increased gas prices as a result of the Ukraine war. The federal government assumed the costs for the December discount.
Technically, this was solved by not billing the gas and district heating customers for the month of December, but allowing the gas and district heating suppliers to apply to the federal government as a compensation payment. Individual characteristics of the end consumer were not taken into account, as the starting point was the individual gas or district heating connection.
The fact that the suppliers have no information about the income situation of the customers does not need to be discussed. In order to ensure taxation, new regulations were codified in the Annual Tax Act 2022. According to these regulations, taxation of the relief amount is provided for from a taxable income of 66,915 euros or 133,830 euros in the case of joint assessment.
It is feigned that the relief is part of other income. The inflow of the amount is in the year the statement is issued. However, taxation only begins if the income limits are exceeded in the 2023 assessment period. The materials do not reveal why the legislature chose the limit of 66,915 euros. The taxation of the relief amount is not without concerns.
Legislators are trying to undermine the basic system
“The guiding principle of income tax law is to separate the sphere of employment from the private sphere and thus the generation of income from the use of income. The taxation of the relief from emergency aid in the private sector breaks completely with this system.” Apparently, the taxpayer experiences a relief by taking over the December deduction. “The costs of his private life are lower thanks to the state aid,” says Peter Mandler, Hessian University for Public Management and Security.
There is no income within the meaning of the seven types of income of the Income Tax Act. The legislature saw this fact and tried to undermine the basic system with the trick of fictional taxation.
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What is also new is that a cash benefit is only to be regarded as income in the sense of a type of income above a certain taxable income. In this way, the legislature succeeds in mixing the previously separate levels of income determination and tariff. The ability to perform is reflected in the income. The tariff only represents the determination of the tax burden.
Are compensatory payments considered social benefits?
With this regulation, the legislature is also putting another principle up for discussion. Social benefits are not taxable due to the lack of earned income status. Parental allowance and sick pay are tax-free. They are only subject to the so-called progression proviso and increase the individual tax rate.
Dogmatically, the question arises as to how the compensatory payment fits into this system. The payment is certainly more of a social character payment than an income generation payment.
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In practical terms, considerations as to whether a legal remedy to attack taxation appears sensible because of the systematic upheavals are likely to be more significant in practice. The concern of the legislature was that high earners share in the costs of crisis management to a greater extent than low earners. Due to the short reaction time, accurate and socio-political aspects have been difficult to implement.
Professor Michael Stahlschmidt is head of the tax law department at the trade journal “Betriebs-Berater” and editor-in-chief of the trade journal “Der Steuerberater”. This article comes from the cooperation between the Handelsblatt and the trade journal.
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