Sektsteuer, or to give it its proper name Schaumweinsteuer is a tax on some types of alchoholic drinks in Germany.  In particular this applies to Sekt – sparkling wine.

It was originally introduced in 1902 to fund the building of what is now known as the Kiel Canal and of the Imperial Navy, and was later used to provide funds to build Germany’s U-Boot fleet.  However, between 1933 and 1939 the tax was not applied in order to help the economy during the Great Depression.

The tax is still applied today.

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The Solidaritätszuschlag is an additional form of tax that was originally conceived to assist with the re-building of East Germany after re-unification.

It was introduced in 1991 and although there was a break of 2 years in the 1990s, it is still valid today and anyone who pays tax in Germany also pays this Zuschlag on top.

The Solidaritätszuschlag is often a point of discussion, especially a to how long we will have to continue paying it – 18 years after re-unification.  However, at the moment there appear to be no plans to discard it again.

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MwSt is the abbreviation for Mehrwertsteuer, which is also known as Umsatzsteuer (USt).  This is the equivalent to VAT in the UK.

At present, MwSt is 19% for most items in Germany, with some items such as basic foodstuffs and books being only 7%.  For some goods and services (eg. stamps) there is currently no MwSt.

The term “Mehrwertsteuer” was introduced in 1968, but the principles were first introduced as a form of stamp duty in 1916.

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The Finanzamt is the German tax office.

Normally, you only contact with the Finanzamt will be your annual tax return – the Einkommenssteuererklärung.

However, if you are self-employed then you will come into close contact with it as you are involved in Umsatzsteuer (VAT) for your business and taxes such as Lohnsteuer for your employees.

The Finanzamt also collects Church Tax on behalf of the churches and if you buy a flat or a house in Germany then they will also send you a bill for Grunderwerbssteuer (land purchase tax).

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The Gemeindeschlüssel is an 8-digit number that identifies the local authority in Germany. When you first register your address, the form requires you to give this number, although it is often pre-printed.

If not, ask at the town hall where you are registering. Most people will not know their Gemeindeschlüssel and you are highly unlikely to need it at any other time!

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