Business

German Cabinet adopts bill to give gay couples equal tax benefits

Jun 15 2013
Written by Corinne Pinfold

The German cabinet has adopted a bill granting same-sex couples in civil partnerships the same income tax benefit as married opposite-sex couples, which will now be considered by parliament.

Married couples in Germany are allowed to use a “spousal splitting” tax break in which they pool their incomes and divide their earnings to calculate individual income tax.

If the bill passes through parliament same-sex couples in civil partnerships would be able to use the same spousal splitting to pay less income tax, applying retroactively from 2001, when Germany introduced civil partnerships.

The Bundestag, or lower parliamentary house, will vote on the bill on 28 June. If successful it will then proceed to the Bundesrat, or Upper House.

Germany’s highest court ruled earlier this year that gay couples are entitled to the same tax benefits as married heterosexuals – a ruling which threatened to deepen rifts within Chancellor Angela Merkel’s conservatives just three months before an election.

Last August, Chancellor Merkel rejected calls for gay couples to receive the same tax breaks enjoyed by heterosexual married couples.

Several members of her Christian Democrats (CDU) stated that the party should have moved forward with granting equal tax rights.

But the proposals were officially dropped at last December’s CDU conference.

Gay Foreign Minister Guido Westerwelle, of the Free Democrats (FDP), said the ruling showed the time had come “for German tax law to be as modern as its society”.

In February, the Constitutional Court ruled that one member of a civil partnership should be able to adopt their partner’s stepchild or adopted child, and the German Government said it would change the law in 2014.