Published: 01.11.1999 〉 Heft 11/1999 〉 Resort: Articles
Submitted: N. A. 〉 Feedback to authors after first review: N. A. 〉 Accepted: N. A.
In Germany, taxes on capital assets of farm businesses used to be levied according to a set of criteria the most essential being the standard value (Einheitswert) of the farm. However, this basis and procedure was ruled illegal by the Federal Supreme Court and con sequently, Parliament has to vote on a new tax pattern for assessing farm businesses.Taking into account the different requirements of the two taxes, this study proposes various amendments for taxing agricultural land and farm estate property.Due to the annual rating requirement and its relatively low value, taxation of land cannot afford a complicated method of assessment; it must be easy to apply. For the legacy duty, on the other hand, accruing only in cases of occasional farm transfer precision and justice of taxation deserve higher priority. Valuation costs matter less in view of the high tax eventually imposed on the inidvidual farmer. Therefore, dealing with land taxation, it is recommended to set up a simple pattern for estimating net farm profits as a basis of assessment. This method would pose no problem to apply. A more sophisticated and at the same time more costly method is proposed for assessing the estate duty. It is based upon an estimation of individual farm proceeds (Einzelertragswertverfahren). Moreover, it may be of interest that all recommendations made comply with current efforts to harmonise present tax systems of EU member countries.