Union calls for tax returns to be scrapped for employees in Germany

The German Tax Union (DTSG) is calling for tax returns to be majorly simplified, if not abolished entirely, for employees, saying that this would save everyone a lot of “time, stress, and money”.

Calls for tax returns to be abolished for employees in Germany

As the deadline approaches for submitting a tax return in Germany, the DTSG has come forward to call for tax returns to be simplified for people with simple tax situations, specifically employees with no additional forms of income, and pensioners. 

“We demand that tax law be simplified - fewer forms, fewer receipts, more digital solutions. Flat rates instead of individual invoices wherever possible,” the head of DTSG, Florian Köbler, told the Funke Media Group. “Specifically, we call for the abolition of tax returns for employees. Instead, the tax return should be prepared completely automatically, and the employee only needs to review it and supplement it if necessary.” 

Köbler has also called for pensioners to be exempt from the obligation to file tax returns, advocating for a “withholding tax” to be applied to benefits by pension funds, exactly how income taxes are deducted “at source” from the salaries of employees by the employer. 

German tax offices swamped by employee tax returns

The Handelsblatt writes that more and more people in Germany submit a tax return each year, despite not being required to do so, presumably in the hope of receiving a refund. In 2021, there were 26,1 million taxpayers in Germany with a simple employment situation, meaning they did not have to submit a tax return. 14,9 million of them filed a return anyway, and 12,9 million received a refund, averaging 1.172 euros, according to Destatis.

The DTSG has warned that this increasingly heavy workload is coming at the same time as staffing issues, as the industry faces a shortage of skilled workers. Its call to slash bureaucracy and paperwork is an attempt to free up resources in tax offices, enabling officers to focus on “large-scale tax fraud” and other more lucrative revenue streams. 

German government plans to simplify tax administration

The German government has already pledged to simplify tax laws in the coming years. In their coalition agreement, the CDU, CSU and SPD pledged to simplify and standardise taxes as much as possible, expand the use of pre-filled and automated tax returns, and make digital tax filing mandatory in future - but the details of these plans are yet to be properly ironed out. 

Indeed, the Deutsche Rentenversicherung wrote as recently as June 26, 2025, that there is currently “neither a law nor a draft law… [nor] any concrete plans” to implement a withholding tax on pensions. 

The deadline for submitting your 2024 tax return is July 31, 2025. If you are working with a tax advisor, the deadline is automatically extended to April 30, 2026.