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BUDGET

Free Democrats pick new fight over airport tax

The ruling coalition partners face a fresh round of squabbling after the Free Democrats called on Friday for changes to the proposed airport tax announced just weeks ago as part of Chancellor Angela Merkel's austerity package.

Free Democrats pick new fight over airport tax
Photo: DPA

Free Democrat (FDP) deputy parliamentary leader Patrick Döring told daily Bild the tax needed an overhaul. It was not fair, he said, that ordinary people going on holiday had to fork out extra charges while private jets got to avoid the tax.

He also demanded that business travellers and the wealthy pay a fairer share of the burden.

“First class travellers must pay more,” he said. “This way, the charge for the ordinary passenger can clearly be lowered.”

Under the present plan, passengers leaving German airports would pay a flat rate of €13 for short flights and €26 for long-haul flights. Transit passengers, freight, military flights and private jets are all exempt.

Chancellor Merkel’s centre-right coalition announced the charges just over a month ago as part of its effort would slash €80 billion from the budget by 2014. The airport tax would aim to raise €1 billion a year to funnel into the government’s severely drained coffers.

Döring’s criticism is the latest in a series of public rows between Merkel’s conservative Christian Democrats and their junior coalition partners, the FDP, with many of the disagreements centring on tax policy.

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CROSS-BORDER WORKERS

Germany and France extend Covid tax breaks for cross-border workers

Germany and France have agreed to extend the relaxation of tax rules for cross-border workers until the end of the year.

Cross-border workers commute by car but they can for now continue to work at home
Cross-border workers usually have to commute but can for now continue to work at home.. Photo: Fabrice Coffrini / AFP

The agreements between France and the governments of Belgium, Luxembourg, Germany, Switzerland and Italy avoids double taxation issues for anyone travelling across the French border to or from those countries in order to work.

During the pandemic, tax rules were eased to allow French cross-border employees, like their counterparts in Belgium, Luxembourg, Germany, Switzerland and Italy, to work from home without having to change their tax status.

The deals, which were established at the beginning of the health crisis in March 2020, were due to end on September 30th – and would have plunged cross-border workers still working from home because of the health crisis into renewed uncertainty over their taxes.

The latest extension of these agreements means there’s no confusion over where a cross-border worker pays their taxes until December 31st – for example cross-border workers who work in Geneva but live in France, who normally pay their taxes and social security contributions in Switzerland. 

Under normal circumstances, anyone living in France who works in Switzerland can spend no more than 25 percent of their time working from home. If they exceed this time limit, they would have to pay these tax charges tin France rather than in Switzerland, which would be much higher.

The agreements between France and Belgium, Luxembourg, Germany and Switzerland “provide that days worked at home because of the recommendations and health instructions related to the Covid-19 pandemic may … be considered as days worked in the state where [workers] usually carry out their activity and therefore remain taxable,” according to the statement from the French Employment Ministry.

In the case of Luxembourg, days worked from home because of the health crisis are not counted in usual the 29 day limit.

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