Federal government discusses bringing forward the abolition of the solidarity tax (Soli)

The good budget situation at the end of 2019 has led the Federal Minister of Finance to consider implementing the partial abolition of the solidarity surcharge as early as mid-2020.

Due to the unexpectedly high tax revenues last year, the Federal Minister of Finance has brought up the idea of bringing forward the partial abolition of the solidarity surcharge by six months. However, the minister has left open exactly how this is to work. The simplest option would be to bring it forward by a full year. This would also render many constitutional complaints invalid. But then the tax revenue for 2020 would be too low. Bringing it forward to July 1, 2020 seems like a good compromise, but legally, a change in the middle of the year would pose considerable challenges. While timely implementation would be possible with little effort in the case of payroll tax withholding, the question then remains as to how to proceed with the assessment of tax returns in the coming year. Whether the plan will actually be implemented is therefore still open.