Steuern: Gesetzentwurf: Auf Abfindungen sollen unter bestimmten Bedingungen keine Steuern mehr fällig werden

Bundesfinanzminister Lars Klingbeil (SPD) plans to simplify the tax system with a package of measures, according to the Handelsblatt. The "Tax Simplification Act 2027" is currently being drafted and voted on within the federal government. If passed, the law will change several things for workers, taxpayers, and businesses.

One of the key points is that smaller severance payments may become tax-free under certain conditions. The tax return will only be filed electronically in the future. The threshold for filing a tax return increases to 800 euros per year. Klingbeil also intends to abolish the disputed tax classes III and V, which was previously reported exclusively by the Handelsblatt.

The 142-page law outlines 28 measures for tax simplification. Businesses are expected to benefit from fundamental relief. The tax law will be simplified and structurally improved, according to the draft. The Finance Ministry is planning a "tax exemption from severance pay during timely resumption of employment." The new rule applies to severance payments up to 5,000 euros.

Certain prerequisites must be met, such as starting a new job within four months and the severance being regulated in a collective agreement. The decision on whether all prerequisites are met will be made by the tax office as part of the tax return. The tax exemption is to take effect from the 2027 tax year and only apply to severance payments paid after December 31, 2026.

Another change is that income tax returns will no longer need to be filed on paper but exclusively electronically. The requirement for electronic submission, such as through the Elster tax software, is now extended to all taxpayers, including employees and pensioners. It is estimated that around 15.7 million citizens filed their 2025 tax return electronically, compared to 4.6 million in paper form.

The change is expected to reduce the workload in the tax offices and lead to faster processing of tax returns. Fewer tax returns mean up to 11,000 fewer mandatory declarations.

The abolition of tax classes III and V, popular among couples, is also proposed. The tax will be levied based on actual income. The so-called factor method of Class IV will be used for couples. Previously, couples could choose whether to be classified under Class IV or have one partner in Class III and the other in Class V. Class III offers a smaller monthly tax deduction, but the annual tax impact remains the same as the system checks if too much or too little tax was paid and adjusts accordingly.

The Finance Ministry justifies the change as it reduces bureaucracy for citizens by eliminating the mandatory declaration requirement in many cases. Starting from January 1, 2030, tax classes III and V will no longer be applied to salary deductions.