Details
| Original language | English |
|---|---|
| Pages (from-to) | 925-966 |
| Number of pages | 42 |
| Journal | Public Finance Review |
| Volume | 47 |
| Issue number | 5 |
| Early online date | 13 Aug 2019 |
| Publication status | Published - Sept 2019 |
Abstract
Using a survey of more than 18,000 taxpayers in North Rhine-Westphalia (Germany), we estimate the income tax compliance costs of German households and study the determinants of these costs. We find that taxpayers need between 9.13 and 10.23 hours and spend €106 to meet their income tax obligations. The average total burden is between €228 (lower bound estimate) and €321 (upper bound estimate). The aggregate cost burden ranges between 2.03 percent and 2.92 percent of the German income tax revenues of tax year 2015. Although these costs have decreased significantly over recent years (mainly for self-preparers without self-employment income), international comparisons illustrate that the German burden is still located in the upper middle. The five most important cost drivers that increase individual costs are the use of tax advice, the appeal procedure, income, return complexity, and education. We cannot confirm that e-filing reduces taxpayers’ compliance costs.
Keywords
- personal income tax, tax complexity, tax compliance costs, tax simplification
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Finance
- Economics, Econometrics and Finance(all)
- Economics and Econometrics
- Social Sciences(all)
- Public Administration
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In: Public Finance Review, Vol. 47, No. 5, 09.2019, p. 925-966.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - The Income Tax Compliance Costs of Private Households
T2 - Empirical Evidence from Germany
AU - Blaufus, Kay
AU - Hechtner, Frank
AU - Jarzembski, Janine K.
N1 - Funding information: We thank three anonymous reviewers, Alexander N. Schwäbe, and the Ministry of Finance of North Rhine-Westphalia. The author(s) received no financial support for the research, authorship, and/or publication of this article.
PY - 2019/9
Y1 - 2019/9
N2 - Using a survey of more than 18,000 taxpayers in North Rhine-Westphalia (Germany), we estimate the income tax compliance costs of German households and study the determinants of these costs. We find that taxpayers need between 9.13 and 10.23 hours and spend €106 to meet their income tax obligations. The average total burden is between €228 (lower bound estimate) and €321 (upper bound estimate). The aggregate cost burden ranges between 2.03 percent and 2.92 percent of the German income tax revenues of tax year 2015. Although these costs have decreased significantly over recent years (mainly for self-preparers without self-employment income), international comparisons illustrate that the German burden is still located in the upper middle. The five most important cost drivers that increase individual costs are the use of tax advice, the appeal procedure, income, return complexity, and education. We cannot confirm that e-filing reduces taxpayers’ compliance costs.
AB - Using a survey of more than 18,000 taxpayers in North Rhine-Westphalia (Germany), we estimate the income tax compliance costs of German households and study the determinants of these costs. We find that taxpayers need between 9.13 and 10.23 hours and spend €106 to meet their income tax obligations. The average total burden is between €228 (lower bound estimate) and €321 (upper bound estimate). The aggregate cost burden ranges between 2.03 percent and 2.92 percent of the German income tax revenues of tax year 2015. Although these costs have decreased significantly over recent years (mainly for self-preparers without self-employment income), international comparisons illustrate that the German burden is still located in the upper middle. The five most important cost drivers that increase individual costs are the use of tax advice, the appeal procedure, income, return complexity, and education. We cannot confirm that e-filing reduces taxpayers’ compliance costs.
KW - personal income tax
KW - tax complexity
KW - tax compliance costs
KW - tax simplification
UR - http://www.scopus.com/inward/record.url?scp=85071315068&partnerID=8YFLogxK
U2 - 10.1177/1091142119866147
DO - 10.1177/1091142119866147
M3 - Article
AN - SCOPUS:85071315068
VL - 47
SP - 925
EP - 966
JO - Public Finance Review
JF - Public Finance Review
SN - 1091-1421
IS - 5
ER -