German states weigh congestion tax

Several German states are considering a flat tax on drivers who use their vehicles in the city centre. The proposed charge of €6.10 per day is roughly equivalent to the price of a day pass for public transport.

German states weigh congestion tax
Photo: DPA

So-called ‘congestion taxes’ are already in place in cities like London and Stockholm and apply to all personal vehicles entering and exiting the city centre.

Ahead of a meeting of transport ministers in Cottbus, the Baden-Württemberg transport minister Winfried Hermann, of the Greens Party, argued the tax is badly needed in order to “maintain and modernize the entire transport infrastructure.”

But the federal commissioner for tourism Ernst Hinsken, of the conservative Christian Social Union, warned against defrauding commuters and tourists.

Hinsken rejected the proposed tax, telling the Bild newspaper “the congestion charge is designed to fill the cash-strapped coffers of state and local authorities.”

He argued the tax would unfairly punish commuters who already face a “horrendous rise in petrol prices.”

The retail association HDE also rejected the new congestion charge. Vice President Lovro Mandac said the tax would make the city centre a less attractive shopping destination for customers. “The downtown shopping area is the soul of every city and each year it’s being hit with more taxes and fees,” he said.

State ministers and transport officials are expected to debate the pros and cons of the proposed tax at a two-day meeting kicking off on Thursday in Cottbus.

DAPD/The Local/sh

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


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.