Tax authority initiates tax return - endeavor in Hesse
Automatic Tax Assessment Pilot Project Launched in Hesse
The state of Hesse is taking a significant step towards modernizing its tax administration with the introduction of an automatic tax assessment pilot project. The initiative, currently being tested on a small scale, involves around 6,000 taxpayers in Kassel who have missed the 2024 income tax return deadline.
Under the pilot project, taxpayers will receive a proposal from the authority instead of filling out a tax return themselves. This proposal is based on data such as income, pensions, and insurance. Taxpayers can then accept or supplement the proposal using the Elster software.
Not every employee in Germany is obliged to file an income tax return. However, those who receive replacement income or have multiple employers must do so. Replacement income includes unemployment benefits, parental leave benefits, or short-time work benefits in excess of 410 euros per year, or having multiple employers.
The Hesse Taxpayers' Association and the German Tax Union view this pilot project as a step towards a more citizen-friendly tax administration. Joachim Papendick, chairman of the Hesse Taxpayers' Association, believes the project is a step in the right direction but criticizes the delay in implementation. On the other hand, Florian Köbler, federal chairman of the German Tax Union, sees the pilot project as an important step towards full digitalization.
Hesse's Finance Minister Lorz views the pilot project as a step towards saving resources for the authority and benefits for both parties. The German Tax Union believes that full digitalization could allow tax officials to focus on complex and important cases.
It is still possible for taxpayers to submit a self-prepared tax return if they wish. However, if a taxpayer does not respond within four weeks, the tax office will issue a notice.
Further joint steps by the federal government and other states are needed to implement the assessment of tax returns by the authority on a large scale. The success of the pilot project in Hesse could pave the way for similar initiatives across Germany, making tax filing more efficient and convenient for millions of taxpayers.
The Finance Minister of Hesse, Lorz, envisions the pilot project as a means to save resources for the authority and benefit both parties in terms of business and finance. The German Tax Union anticipates that full digitalization could enable tax officials to focus on complex finance matters, improving the efficiency of the business sector.
