Tax authorities launch tax declaration project in Hesse
Automatic Income Tax Pilot Project Launched in Hesse, Germany
The state of Hesse in Germany has initiated a pilot project aimed at simplifying income tax compliance for citizens. This project, which is currently focused on around 6,000 taxpayers under the Kassel tax office who missed the 2024 income tax filing deadline, eliminates the need for an initial separate tax return submission.
Details of the Pilot Project
In this pilot scheme, the tax office automatically prepares a draft income tax assessment proposal for participating taxpayers. These taxpayers then receive this proposal, which they can accept as is or modify and supplement using the Elster software system. This approach simplifies compliance by eliminating the need for a separate tax return filing initially.
The project's potential future expansion is not yet clear, although the piloting of such a system suggests a testing phase to evaluate its effectiveness and taxpayer response before any broader rollout.
Eligibility and Process
Initially, the project is offered to approximately 6,000 taxpayers under the Kassel tax office who failed to file income tax returns for 2024. The basis for the tax office's proposal is data such as income, pensions, and insurance. However, it's important to note that not every employee in Germany is obligated to submit an income tax return.
Criticisms and Support
Joachim Papendick, chairman of the Federation of Taxpayers in Hesse, views the pilot project as a step in the right direction but criticizes the delay in its implementation. On the other hand, Hesse's Finance Minister Lorz sees the pilot project as the next step towards an even more citizen-friendly tax administration, and believes it will also save resources for the authority.
Important Considerations
It's worth noting that the pilot project requires that the taxpayer is obligated to submit an income tax return and is not legally represented or advised. If no action is taken, the tax office will issue a tax notice after a period of four weeks.
If successful, the Hessian pilot project could pave the way for a more modern, citizen-friendly tax administration. The German Tax Union, led by Florian Köbler, has welcomed the pilot project as an important step towards digitalization, allowing tax officials to focus on complex and important cases. However, for the most current and comprehensive information, official communications from Hessian state finance authorities or the German tax administration would be the best sources to consult.
The automation of income tax assessments in the Hessian pilot project falls under the realm of business and finance, as it is aimed at streamlining the process of tax compliance for citizens. The financial implications of this project could potentially save resources for the authority, as highlighted by Hesse's Finance Minister Lorz.
