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Planned Replacement of Ehegattensplitting
Germany’s Finance Minister Lars Klingbeil has proposed a replacement for the longstanding Ehegattensplitting tax scheme, targeting newly married couples. The new model, termed “fiktives Realsplitting” (fictive real splitting), aims to reform the taxation of married partners by allowing them to allocate a specific tax allowance between each other to optimize their joint tax liability. Existing marriages will retain the current Ehegattensplitting system, ensuring no retroactive changes for those already married [Source 1][Source 2][Source 3].
Details and Expected Impact of the Fiktives Realsplitting
The fiktives Realsplitting model bases the taxable allowance on the maximum deductible amount for spousal support, an amount currently applied to divorced or permanently separated couples. This approach intends to reduce tax incentives that traditionally encourage women to remain in part-time employment within marriage. Under this system, partners can split a defined allowance for tax purposes, which will be smaller than the advantage offered by the existing Ehegattensplitting, especially in households with one high earner and one low or no earner. For example, in cases where one partner earns €100,000 and the other has no income, the new model could increase the couple’s tax burden by approximately €4,100 to €4,500 annually compared to the current system [Source 1][Source 3][Source 8].
The reform also proposes to abolish the existing tax class combinations III and V, which couples currently use to optimize their payroll tax deductions. Removing these classes is intended to eliminate tax-based behavioral incentives that preserve the so-called “part-time trap” mainly affecting women. However, this reform is part of broader goals to promote equitable workforce participation and is not expected to entirely resolve gender disparities on its own [Source 2][Source 4].
Implications for Expats and International Residents in Germany
The proposed changes to Ehegattensplitting primarily concern married couples who establish their marriage in Germany from the reform’s effective date onward. Expats, international students, and foreign workers getting married in Germany should be aware that their tax calculations may differ significantly compared to the traditional splitting system. Those with significant income disparities between spouses could face higher tax bills under the new fiktives Realsplitting.
International residents should monitor legislative developments closely, as the exact implementation details and timelines are not yet finalized. Couples planning to marry might want to consult tax advisors early to understand potential impacts on household finances. While existing marriages will continue under the old system, new marriages must prepare for these different tax rules, which could affect income allocation, tax obligations, and payroll deductions [Source 1][Source 2].
For further details on the reform, readers can visit the original governmental announcement here: Tagesschau report on Ehegattensplitting replacement [Source 2].
