page_title: Taxation in Germany
section_title: Tax revenue
hierarchical_section_title: Taxation in Germany / Tax revenue
caption_attribution_description: English: German Tax Revenue 2007
context_page_description: Taxes in Germany are levied by the federal government, the states as well as the municipalities. Many direct and indirect taxes exist in Germany; income tax and VAT are the most significant.
  The legal basis for taxation is established in the German Constitution, which lays out the basic principles governing tax law. Most taxation is decided by the federal government and the states together, some are allocated solely at the federal level, some are allocated to the states, and districts and municipalities may enact their own tax laws. Notwithstanding the division of tax law jurisdiction, in practice, 95% of all taxes are imposed at the federal level.
  At the federal level, the government receives tax revenues from residents in the form of individual income tax, property sales taxes, and capital gains. The amount of federal tax liability may be reduced by various deductions, and mitigated by various allowances for children. Some non-residents are liable in Germany if they have certain types of income there. Generally, public and private corporations are liable for taxes in Germany, with certain exemptions such as charitable foundations and religious institutions.
context_section_description: In 2014, German tax revenue totaled €593 billion.
  Tax revenue is distributed to Germany's three levels of government: the federation, the states, and the municipalities. All of these are jointly entitled to the most important types of tax (i.e., value-added tax and income tax). For this reason, these taxes are also known as "shared taxes". Tax revenue is distributed proportionately using a formula prescribed in the German Constitution.
caption: German Tax Revenue 2007
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