The beginning of 2023 brings a host of tax changes. The following is an overview of selected legal adjustments:
Income Tax
As of July 2023, the third bracket of the income tax rate will be reduced from 42% to 40%. To simplify, a blended rate of 41% is applied for the entire year 2023. For the second stage, the tax rate in 2023 is 30.
The marginal amounts of the progression levels of the tariff – with the exception of the 55% level – as well as certain deduction amounts were also increased ("abolition of cold progression"). The values for 2023 were fixed in the law, and from 2024 the automatic adjustment will be made.
| Tax rates 2023 in € | Tax rate |
| Up to 11.693 | 0 % |
| Over 11.639 – 19.134 | 20 % |
| Over 19.134 – 32.075 | 30 % |
| Over 32.075 – 62.080 | 41 % |
| Over 62.080 – 93.120 | 48 % |
| About 93.120 – 1M. | 50 % |
| Over 1 million. | 55 % |
The limit for immediate depreciation of low-value assets has been reduced from € 800.00 to € 1.000,00 raised. For business income, this applies to fiscal years beginning after 31.12.2022 start.
A new investment allowance (IFB) can be used for the acquisition or production of certain assets from 1.1.2023 as operating expenditure to be made valid (see in addition also separate article).
The turnover limit of the small business lump sum in the income tax was increased by € 5.000.00 (see separate article).
Corporate Tax
The corporate income tax rate has been reduced from 25% to 24. The withholding tax on income from the granting of management rights will be 7.5% for corporations from 2023 (instead of the current 8.25%).
Wage accounting – employee costs
The employer's contribution to the Family Burden Equalization Fund was reduced from 3.9% to 3.7%, to the extent specified in certain wage-setting regulations.
This includes, among other things, an internal determination for all employees or certain groups of employees.
The new non-cash remuneration values for official housing must be taken into account, the interest rate for non-interest-bearing employer loans has been increased to 1.0.
From the beginning of 2023, the method of calculating the commuter allowance will change for those cases where the employer provides the employee with a ticket free of charge or pays a share of the cost of a public transport ticket (weekly, monthly or annual ticket).
Employer subsidies for non-work-related trips in the context of car sharing are exempt from income tax up to € 200.00 per calendar year.
Family allowance, child deduction
The family allowance and the child deduction will be adjusted annually for inflation starting in 2023 (see separate article).