Tax debts in Berlin: tax offices are struggling with a backlog of 886 million euros!

Tax debts in Berlin: tax offices are struggling with a backlog of 886 million euros!

The tax offices in Berlin face significant challenges in collecting overdue tax debts. Loud rbb24 As of June 30, 2023, the arrears totaled 886 million euros, a marginal decrease compared to the 905 million euros in February 2022. The debtors are both private individuals and companies, with the arrears spread across different types of taxes.

The highest arrears relate to income tax at around 270.7 million euros, followed by sales tax at 297 million euros and corporation tax at 67 million euros. The trade tax has arrears of 92 million euros. Almost 41 million euros are also outstanding for wage tax, while inheritance tax and real estate transfer tax amount to 47.7 million euros and 29.9 million euros, respectively.

Successes and challenges

Despite these figures, there are positive developments: VAT arrears were reduced by around 125 million euros. The tax administration in Berlin attributes this success to the improvement in the special situation of the Berlin International tax office since December 1, 2023. However, tax expert Sebastian Schlüsselburg criticizes the high tax arrears, especially in the corporate sector. The expert calls on Finance Senator Evers (CDU) to strengthen the tax offices through a targeted personnel policy. Currently, 141 of the positions in the tax offices for corporations are vacant, and a total of 484 vacancies in the tax administration and tax investigation.

The problems in the collection process could also be linked to reduced processing times for income tax returns. Four years ago, tax offices needed an average of 68 days for processing, while this number has now been reduced to 40 days. The tax office in Charlottenburg is considered the fastest at 35 days. Berlin newspaper highlights that processing times are longer on average in August.

Deferral of tax claims

Taxpayers who have financial difficulties have the option of deferring tax claims. The tax authorities can schedule this if collection would represent significant hardship for the debtor. There are specific requirements, such as unfavorable economic conditions or the avoidance of serious payment difficulties. Applications for deferrals must be submitted in writing to the responsible tax office and can ideally be submitted via the Elster portal. Service Berlin also provides information about the necessary documents and the fees for submitting the application.

While Berlin is still considered a “recipient country” in the state financial equalization, it is important to address these structural challenges in order to further reduce the backlog and secure the financial stability of the capital.