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WEALTH

Germany’s rich get richer despite crisis

The financial crisis can't touch them - Germany's richest just keep getting richer. Top earners' salaries are up, but the bottom 40 percent of full-time employees are earning less after wages were adjusted for inflation.

Germany's rich get richer despite crisis
Photo: DPA

A government report on poverty seen by Tuesday’s Süddeutsche Zeitung newspaper said the development “violated the people’s sense of justice.”

The richest ten percent of German households have more than half of the total assets, the report said – taken to include real estate, investments, land or claims from company pensions. And the poorest fifty percent of households have just barely one percent of the net wealth.

The net wealth of German households has doubled in the past two decades, from €4.6 billion to more than €10 billion.

Süddeutsche Zeitung said the report also showed that there was still a wealth gap between people in former eastern Germany and western Germany. West German households had an average net wealth of €132,000, east German households just €55,000.

Private citizens may be getting richer, but the report showed the state was getting poorer. The Labour Department report claimed that net assets of the German state fell by more than €800 billion between early 1992 and early 2012.

It also noted that as part of the rescue efforts during the financial crisis there was “an observable shift of private assets and liabilities in state budgets.”

The report defended the increase in non-traditional employment, including part-time work, and temporary or contract positions, saying these jobs were not created at the expense of normal working conditions.

But the Ministry of Labour did note that: “hourly wages which are insufficient to secure the livelihood of a single person who is working full-time, exacerbates the risk of poverty and weaken social cohesion.”

The Local/sh

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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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