Overview of federal budgetary and financial data up to and including July 2022 - Federal Ministry of Finance - Resources (2025)

Revenue

Federal revenue for the period from January to July 2022 totalled approximately €203.4bn, up by 15.3% (about €27.0bn) on the year. Tax receipts (including EU own resources that are subtracted from the total) increased by 15.7% (about €25.7bn) on the year. Revenue from value added taxes rose by 24.5% (about €15.6bn), while receipts from income tax and corporation tax grew by 13.7% (about €11.4bn). Federal revenue fell as a result of a €4.0bn year-on-year increase in public transport subsidies to the Länder. These additional subsidies are being used to offset revenue losses in the public transport sector resulting from the Covid pandemic and to finance the 9-euro ticket scheme (a temporary reduced-rate public transport ticket costing €9 per month in the months of June, July and August 2022).

The category of “other revenue” recorded a gain of 10.4% (about €1.3bn) on the year in the January–July period.

Total expenditure

Federal expenditure in the first seven months of 2022 totalled approximately €269.2bn, down by 4.9% (about €14.0bn) compared with the same period last year. A breakdown by economic category shows that consumption spending remained basically constant on the year, falling by just €0.5bn. There were several contrasting trends overall. For example, ongoing subsidies to social security funds were up by about €10.3bn on the year, which increased spending levels. This includes higher federal payments (totalling roughly €11.0bn) to the health fund and the long-term care insurance compensation fund to cover pandemic-related costs. In contrast, the elimination of grants for a programme to future-proof hospitals reduced spending by about €3.0bn. In addition, spending on subsidies for the procurement of Covid vaccines rose by around €1.9bn on the year in the January–July 2022 period. Operating expenditure was also up on the year by 13.7% (roughly €2.5bn), due mainly to costs incurred in connection with the build-up and release of gas reserves. Approximately €1.5bn was spent for this purpose in the first seven months of 2022. The overall rise in interest rates meant that interest expenditure doubled on the year, rising by around €6.9bn.

The reduction in spending compared with the same period last year was mainly due to lower subsidies to companies, which fell by 43.8% (around €19.4bn). Assistance to businesses affected by the fallout from the Covid pandemic amounted to roughly €7.9n in the first seven months of 2022, compared with approximately €27.0bn in the same period last year. Moreover, grants to public administrations were down by 13.4% (about €3.7bn) on the year in the January–July 2022 period, due mainly to the fact that in 2021 a €2.5bn grant was allocated to the Energy and Climate Fund (known as the Climate and Transformation Fund since 12 July 2022), which increased the baseline figure. In addition, pandemic-related compensation payments under section 21 of the Hospital Financing Act (Krankenhausfinanzierungsgesetz) declined by about €1.1bn.

Investment spending totalled about €18.5bn in the first seven months of 2022, down by 42.3% (roughly €13.6bn) on the year. This was mainly because the liquidity assistance provided to the Federal Employment Agency in the January–July period was around €12.7bn lower than in the same period last year. At the end of the 2021 budget year, the assistance granted over the course of the year that was not repaid by the end of the budget year was converted into a subsidy for the Federal Employment Agency. Fixed asset investment in the January–July period was down by roughly 2.3% (about €0.1bn) on the year.

Fiscal balance

The federal budget recorded a deficit of approximately €65.8bn for the January–July 2022 period.

Revenue and expenditure are subject to strong fluctuations over the course of the fiscal year and thus have an uneven effect on cash funds in individual months. Net borrowing also tends to fluctuate considerably over the course of the year. This means that the fiscal balance at any given point in the year and the corresponding net borrowing figures are not reliable indicators of the end-of-year figures for the fiscal balance and net borrowing.

Tax revenue in July 2022

Total tax revenue (excluding local authority taxes) was up slightly on the year in July 2022 (+0.3%), with revenue from joint taxes rising by 0.9%. Year-on-year growth in revenue from joint taxes and hence tax revenue overall was significantly less dynamic than in recent months. This was mainly due to two of the measures that the federal government has adopted to mitigate the impact of higher energy costs. The 2022 child bonus of €100 was paid out in July 2022. In addition, the increases in the basic personal allowance and the standard allowance for employees, both with retroactive effect as of the start of 2022, have provided noticeable relief for many employees. The result was a tangible year-on-year decline in revenue from wages tax. In addition, the year-on-year comparison in July 2022 was distorted because in July 2021 there was a significant increase in revenue from import VAT due to revenue being posted at a later date for technical reasons (see below). In contrast, there was strong year-on-growth in receipts from non-assessed taxes on earnings in July 2022, which was due to the considerable rise in dividend distributions this year compared with last year. Revenue from taxes accruing solely to the Federation was up by 0.8% on the year in July, while receipts from taxes accruing to the Länder fell by 16.7%.

EU own resources

Transfers of own resources to the EU, excluding customs duties, were up by 81.7% on the year in July 2022. In general, monthly requisitions are based on the annual EU budget that is in force for the respective year and are distributed relatively evenly across individual months. The 2022 annual EU budget is similar to last year’s in terms of volume. In the first months of 2022, the drawdown of EU own resources was lower than in 2021. The result is higher drawdowns this month and last month compared with the same months last year.

Overview of the January–July 2022 period

On a cumulative basis, the January–July 2022 period was marked by a strong increase in tax revenues overall (excluding local authority taxes), which were up by 14.9% on the year. This is partly due to the fact that the 2021 baseline was impacted by the economic effects of the Covid pandemic and by the statutory and administrative tax measures that were taken in response. In the January–July 2022 period, receipts from joint taxes were up by 17.0% on the year, revenue from federal taxes was up by 3.5% and the yield from taxes accruing to the Länder was up by 5.2%.

Distribution among the Federation, Länder and local authorities

The Federation’s tax receipts (after accounting for supplementary federal grants to the Länder) fell by 3.9% on the year in July 2022. This was partly due to lower revenue from wages tax and the inflated baseline figure for import VAT revenue. The main reason, however, was the higher drawdown of EU own resources from the federal budget compared with the same period last year (see above). Public transport subsidies paid by the Federation to the Länder and supplementary federal grants to the Länder were at a similar level as last year.

In contrast, Länder tax receipts (after accounting for supplementary federal grants) were up slightly on the year in July 2022, by 0.8%, despite a significant drop of 16.7% in revenue from taxes accruing solely to the Länder. Länder revenue from joint taxes grew by 2.3% overall on the year. This was higher than the overall increase in revenue from joint taxes, which was up by 0.5%. This is because the fixed allocations to the Länder, which partly determine the share that the Länder receive from VAT receipts, carry more weight when revenue from joint taxes is lower. In addition, in June 2022 the fixed allocations to the Länder were raised again, by €2bn for 2022. In this way, the Federation is supporting the Länder and local authorities with the costs of providing accommodation and care for refugees from Ukraine. Local authorities’ take from their share of joint taxes was 11.6% lower than in the same period last year.

Joint taxes

Wages tax

Cash receipts from wages tax posted a year-on-year drop of 9.0% in July 2022. This is not due to any weakening of the trend in the labour market, which continues to be robust despite the economic impact of Russia’s war of aggression against Ukraine (see the article “Konjunkturentwicklung aus finanzpolitischer Sicht” [“Domestic economic trends from a fiscal policy perspective”] in the current German edition of the monthly report). Rather, it was caused by two of the measures that the federal government has adopted to mitigate the impact of higher energy costs. First, the 2022 Tax Relief Act (Steuerentlastungsgesetz 2022) raised the basic personal allowance and the standard allowance for employees, with retroactive effect as of the start of 2022. As a result, gross revenue from wages tax fell by 0.2% in year-on-year terms in July 2022, after being up by 9.2% on the year on a cumulative basis in the first six months of 2022. Second, child benefit payments – which are financed from wages tax receipts – rose sharply, by 43.1% on the year. This was because of the 2022 child bonus of €100, which was disbursed in July 2022 from wages tax revenue. Due to the trend in the first half of the year, cash receipts from wages tax were up by 10.9% on the year in cumulative terms in the January–July 2022 period.

Corporation tax

Gross receipts from corporation tax fell by 51.6% in July 2022. In months such as July when no prepayments are due and corporation tax receipts are strongly influenced by the revenue administration’s assessment activities, fluctuations in year-on-year revenue figures are common and should not be interpreted as indications of future trends. Payments of research and investment allowances, which are financed from gross receipts, totalled only about €9.9m and thus had only a marginal impact on cash receipts from corporation tax. On balance, cash receipts from corporation tax were down by 53.0% on the year in July 2022. On a cumulative basis, revenue was up by 15.3% on the year in the January–July 2022 period, mainly due to a significant increase in prepayments.

Assessed income tax

Like corporation tax receipts, revenue from assessed income tax in July 2022 was influenced by assessment activities. Here too, significant year-on-year fluctuations can occur. Gross revenue from assessed income tax was down by 16.6% on the year in July 2022. Employee refunds declined by 1.6% on the year. Investment allowance payments, research allowance payments and owner-occupied homes premiums, which are insignificant in terms of amount, were also deducted from the gross figure. On balance, cash receipts from assessed income tax fell by 58.7% on the year in July 2022. On a cumulative basis, revenue rose by 17.3% on the year in the January–July 2022 period. As was the case with corporation tax, this was mainly due to a significant increase in prepayments.

Non-assessed taxes on earnings

Gross receipts from non-assessed taxes on earnings recorded a 86.4% year-on-year rise in July 2022. This was mainly caused by higher revenues from withholding tax on income from capital, due to dividend distributions by corporations being significantly larger than last year in many cases. Refunds by the Federal Central Tax Office, which are financed from gross revenue, totalled about €60m (up by 13.9% on the year). Overall, cash receipts from non-assessed taxes on earnings were up by 87.5% on the year in July 2022. Cumulatively, cash receipts from non-assessed taxes on earnings rose by 43.9% on the year in the first seven months of 2022.

Final withholding tax on interest and capital gains

In July 2022, revenue from final withholding tax on interest and capital gains was 37.6% lower than in the same month last year. Cumulatively, revenue from this tax fell by 22.0% on the year in the January–July 2022 period.

Value added taxes

Revenue from value added taxes fell by 1.3% on the year in July 2022. This outcome was driven mainly by a sharp decline in receipts from import VAT, which were down by 12.8%. In contrast, the yield from domestic VAT was up by 5.3% on the year.

The considerable decline in revenue from import VAT is mainly the result of a significantly inflated 2021 baseline figure. This was because part of the revenue for June 2021 was not posted to government accounts until July 2021 as a result of where the due date (the 26th of the month) fell. When this effect is adjusted for, import VAT revenue actually rose markedly on the year in July 2022. This reflects the considerable year-on-year increase in the value of imported goods, which is mainly due to the very sharp rise in import prices.

Cumulatively, cash receipts from value added taxes were up by 21.0% on the year in the first seven months of 2022. These cash receipts originated largely from transactions that took place from November 2021 to May 2022. Economic activity during this period was higher than during the same period in 2020/2021, which was strongly affected by the pandemic and the measures taken at that time to mitigate its effects; this explains part of the revenue growth recorded in the first half of 2022. Furthermore, the tax measures taken in connection with the Covid pandemic lowered the baseline figures for 2021.

Taxes accruing to the Federation

In July 2022, revenue from taxes accruing solely to the Federation was up by 0.8% compared with the same month last year. Receipts from the solidarity surcharge climbed by 15.6% on the year, thanks to growth in revenue from the taxes that make up its tax base. Revenue gains continued to be posted by insurance tax (+5.3%), alcohol duty (+20.9%) and aviation tax (+192.3%). The very strong increase in receipts from aviation tax is the result of the rebound in aviation activities following very low levels in the previous two years due to the pandemic. In contrast, yields from energy duty, electricity duty and motor vehicle tax fell on the year, by 1.4%, 3.3% and 5.0%, respectively.

Taxes accruing to the Länder

Receipts from taxes accruing solely to the Länder were down by 16.7% on the year in July 2022. Declines in revenue were observed with real property transfer tax (-15.2%), inheritance tax (-29.9%) and beer duty (-0.4%). The increase in receipts from betting and lottery tax, which were up by 43.9%, was mainly due to proceeds from the new online poker tax and virtual slots tax, which have been levied since 1 July 2021. Revenue from fire protection tax was up by 3.7% on the year.

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