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Germany Enacts Package of Relief Measures for Individuals to Mitigate Impact of Rising Energy Prices — Orbitax Tax News & Alerts

Germany published the Tax Relief Act 2022 in the Official Gazette on 27 May 2022, providing a package of tax relief measures to help mitigate the impact of rising energy prices. Measures of the package include:

  • Increase in the basic tax-free allowance for 2022 by EUR 363 from EUR 9,984 to EUR 10,347;
  • Increase in the employee lump-sum deduction for income tax by EUR 200 from EUR 1,000 to EUR 1,200;
  • Increase in the distance allowance for long-distance commuters from EUR 0.35 to EUR 0.38 for 2022 to 2026; and
  • A one-off energy price allowance (flat rate) of EUR 300, with provisions for payment through employers.

The Tax Relief Act 2022 entered into force on 28 May 2022, although the increase in the basic tax-free allowance is considered in force from 1 January 2022.