Germany to Abolish Tax Classes III and V for Married Couples in 2030
The Federal Ministry of Finance in Germany, led by Christian Lindner of the FDP, has announced plans to abolish tax classes III and V for married couples starting in 2030. These two tax classes, commonly selected by couples with significant income disparities for joint tax returns, will be replaced with a new grouping under tax class IV with a factor for fair income distribution. Currently, couples who choose joint assessment benefit from the Ehegattensplitting tax advantage, providing an annual total tax saving of 25 billion euros. Despite the elimination of tax classes III and V, this tax advantage will remain unchanged. The shift aims to ensure a more equitable distribution of the tax burden among couples based on their respective incomes. Couples already have the option to choose to be grouped under tax class IV with a factor, offering a more balanced approach to tax assessment.
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