Germany: Bundestag Passes 4 Tax Bills

The Bundestag passed four tax bills on October 17. The opposition has indicated that it will reject them in the Bundesrat, so a reconciliation committee compromise is likely.

The Bundestag passed four tax bills, on extending the shareholder debt rules to domestic shareholders and other follow-on measures from the Tax Concessions Pruning Act of April 2003, on the trade tax reform, on a tax amnesty against a lump-sum payment of 25% of the amount evaded, and on the 2004 budget accompanying measures, during its sitting on October 17. The bills were passed in a somewhat modified form from their original drafts, but even so the opposition has said that it will use its Bundesrat majority to reject them there. This will probably force the government to turn to the parliamentary reconciliation committee in the hope of finding a compromise between the two chambers. As yet, there is no reliable indication on how a compromise might look. A fifth tax bill, that on collection procedures, in particular enabling employers to largely dispense with paper in connection with employee wage withholding taxes, was referred to a further parliamentary committee - the one dealing with consumer protection issues.