Tax authority initiates tax return - undertaking in Hesse
The state of Hesse is taking a significant step towards modernizing its tax administration with the launch of a pilot project in Kassel. The aim of this initiative is to relieve citizens and increase the efficiency of the tax administration.
The pilot project will see the tax office automatically proposing an income tax setting for around 6,000 taxpayers in the Kassel area. This group consists of taxpayers who missed the 2024 income tax return deadline.
According to Hesse's Finance Minister Lorz, further joint steps by the federal government and other states are needed to implement the automatic processing of tax returns on a large scale.
The automatic income tax proposal system works by the tax office preparing a proposed income tax assessment for certain taxpayers without requiring them to file a separate tax return. However, taxpayers have the opportunity to review and amend the proposal before finalizing it, using the Elster online tax software.
To participate in this pilot system, taxpayers must meet certain requirements. They must be within the selected group of taxpayers covered by the Kassel tax office jurisdiction, have missed the income tax return filing deadline for 2024, and use the Elster software if they wish to supplement or adjust the tax office's proposal before acceptance.
It is important to note that the tax return should usually be completed by 31st July of the following year, but there are possibilities to extend the deadline. Those who receive replacement income such as unemployment benefit, parental benefit, or short-time work allowance of more than 410 euros per year, or have multiple employers at the same time, must submit a tax return. Freelancers, self-employed persons, and traders are generally obligated to submit a tax return. Not every employee in Germany is obligated to submit an income tax return.
The tax office will issue the tax assessment after a period of four weeks if the taxpayer does not respond to the proposal. The proposal from the tax office is based on data such as income, pensions, and insurance, which are already available to the tax administration due to relevant notification obligations.
The German Tax Union, represented by its federal chairman Florian Köbler, welcomes the pilot project as an important step towards a modern, citizen-friendly tax administration. Köbler believes that full digitalization could allow tax officials to focus on complex and important cases.
Joachim Papendick, chairman of the Federation of Taxpayers Hesse, considers the pilot project a step in the right direction but criticizes the delayed implementation. However, Lorz views the pilot project as the next step towards a more citizen-friendly tax administration, bringing benefits to both the authority and taxpayers.
If the test run is successful, the program will be expanded. This approach simplifies tax administration by providing an automatic pre-filled income tax assessment, potentially reducing the burden on taxpayers who miss filing deadlines, while still allowing them to review and amend the proposal before finalizing it.
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