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Law made simple

Simplifying tax declarations

Every year, the tax offices in Germany receive more than 28 million income tax returns. Nearly half of these returns are submitted on paper, while just over half are sent online. For many citizens, completing the income tax forms involves a great deal of effort, partly because many people find the forms difficult to understand. Together with citizens wirksam regieren has therefore drawn up ways for the Federal Ministry of Finance to simplify these forms.

income tax return

income tax return

Photo: Getty Images/iStockphoto/PeopleIm

Income tax returns are complex and time-consuming

Citizen satisfaction with public services is measured in the Federal Government’s life events survey. Examples include formalities after the birth of a child or registering a business. While the survey showed that citizens are generally satisfied with public services, the clarity of forms, application forms and the law ranked lowest in the 16 factors surveyed.

With over 28 million cases per year, income tax returns are one of the main areas where citizens and the state interact. At the same time, the income tax forms are regarded as an example of particularly complex and lengthy forms. Along with citizens and experts from the Federal Ministry of Finance, wirksam regieren identified difficult terminology in two annexes to the income tax return form and developed solutions.

Potential improvements must be drawn up together with citizens

Tax law is complex and includes many special cases. This is reflected in the income tax return forms. In order to identify difficult terminology and find solutions, the wirksam regieren division and citizens explored how the income tax return forms are designed. To this end, citizens filled out two annexes to the income tax return form that affect almost all tax payers – annex N (income from employment) and annex V (pension plans). Using examples, the study identified where the forms can be simplified and how filling them out can be made easier. Some improvements require legislative amendments, while others can be carried out without such changes.

The project identified concrete potential improvements and drew up general principles for drafting forms in plain language.

Working with citizens showed that the forms can be made easier to understand by changing the language used in them, but also by providing a clear structure and layout. Furthermore, these findings led to a large number of concrete recommendations for tax form design and general principles for online and offline forms. These recommendations should be taken into account at an early stage when forms are being drafted.

The findings are being included in current projects by the Federal Ministry of Finance and the Länder in order to make tax forms, notifications and documents easier to understand.

On behalf of the Federal Ministry of Finance